US stocks fell on Thursday as traders weighed the sharp swings in stocks and rates to start the month.
The S&P 500 fell 0.7%, while the Nasdaq Composite fell 0.3%. The Dow Jones Industrial Average lost 276 points, or 0.9%. All three stock indices opened the session lower. All major averages are poised to end the week up more than 4%.
Energy was the best performing sector with a gain of 1.3%. Utilities lagged, falling more than 2%.
The benchmark 10-year rate climbed 5 basis points to 3.809%. The 2-year rate, which is more sensitive to changes in monetary policy, rose by 6 basis points to 4.216%.
Investors are eagerly awaiting Friday’s jobs report, which will show how the labor market fared in September, giving central banks another insight into its rate hike campaign.
On Wednesday, ADP data showed the labor market remained strong among private businesses in September, when companies added 208,000 jobs, beating Wall Street estimates. But on Thursday, jobless claims were higher than expected, signaling that there may be some weakness in the labor market.
“Once again, investors are looking for bad news to be good news,” Wolfe Research’s Chris Senyek wrote in a Thursday note, adding that while September’s report came in below expectations, wage growth is still lagging. will likely hold and pivot from the Federal Reserve unlikely.
“While equities are currently subject to strong upside tears, we strongly believe that our medium-term bearish baseline scenario remains intact,” he added.
Wall Street started the week on a high note, with the S&P 500 staging its biggest two-day rally since 2020. Stocks fought to maintain the winning streak on Wednesday, but ultimately failed. The Dow Jones closed down about 42 points, or 0.14%. The S&P 500 and the Nasdaq Composite fell 0.20% and 0.25% respectively.