The technology sector was more than 2% lower and weighed the most on the S&P 500.
Investor confidence has been shaken this month by a series of selloffs in groups including software amid concern over artificial intelligence’s potential to disrupt certain industries.
A surprisingly strong US jobs report on Wednesday eroded near-term rate cut expectations from the Federal Reserve. On Thursday, data showed new applications for US unemployment benefits decreased less than expected last week.
Expectations the US central bank could have the leeway to cut interest rates had been creeping higher until Wednesday’s jobs report.
Investors have been digesting this week’s data and weighing the Fed’s next steps, and the US consumer price index (CPI), set to be released on Friday, is the next key data point.
Jay Hatfield, CEO and CIO of Infrastructure Capital Advisors in New York, said, “the bull case on the Fed cutting was pretty much centered around the weak employment picture, so that case was challenged.”
Treasury yields extended their declines after a robust auction of 30-year bonds. The yield on benchmark US 10-year notes fell 7.7 basis points to 4.106%, from 4.183% late on Wednesday, and had its biggest drop since Oct 10.
The Dow Jones Industrial Average fell 400.87 points, or 0.79%, to 49,723.02, the S&P 500 fell 78.95 points, or 1.13%, to 6,862.52 and the Nasdaq Composite fell 412.08 points, or 1.79%, to 22,654.39.
MSCI’s gauge of stocks across the globe fell 8.01 points, or 0.75%, to 1,047.70.
The pan-European STOXX 600 index finished 0.5% lower at 618.52 points, with most regional benchmarks also reversing course to close in negative territory.
In currencies, the dollar index was little changed. The index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.04% to 96.95, with the euro EUR= down 0.03% at US$1.1866. Against the Japanese yen, the dollar weakened 0.23% to 152.91.
The yen has rallied as investors have warmed to the view that the new government in Japan will be fiscally responsible and Japan’s finances may be favorable in the long run.
Oil prices dropped due to falling demand, easing concerns over renewed Middle East conflict and expected increases in supply. US crude CLc1 fell US$1.79 to settle at US$62.84 a barrel and Brent LCOc1 dropped US$1.88 to settle at US$67.52.
Spot gold XAU= fell 2.83% to US$4,934.57 an ounce.