Stocks fell Thursday, signaling that technology shares will lead declines for major indexes as investors awaited earnings and assessed fresh data on the U.S. labor market.
The S&P 500 dropped 0.8%, while the Dow Jones Industrial Average fell 0.7%. The technology-heavy Nasdaq Composite continued its tumble from Wednesday, declining 1.1%.
Jobless claims—a proxy for layoffs—remained above the pre-coronavirus pandemic peak of 695,000. New applications for unemployment benefits rose to 861,000 last week, halting a downward trend that had pointed to an improving labor market. Economists had expected to decline in the claims.
Stocks have taken a breather in recent sessions after powering higher for much of 2021. Some investors have been caught off guard by a quick rise in government-bond yields, which appeared to knock technology stocks that have benefited from years of low interest rates. Money managers are also concerned about lofty valuations.
Still, many investors remain upbeat about the outlook for stocks. They point to the probable arrival of more fiscal stimulus as a factor that will drive economic growth and earnings higher in 2021, alongside the reopening of sectors that have been hit hard by the pandemic.