Wall Street’s main indexes have slipped as recent data pointed to still-tight labour market conditions, while US Treasury yields were still at elevated levels.
Even as longer-dated Treasury yields eased from 16-year highs on Wednesday, investors remain concerned that the elevated levels may continue to pressure equities.
Worries about US government spending and its ballooning budget deficit have added to uncertainty around the interest rates trajectory, contributing to a steep sell-off that have caused a rout in Treasury prices.
“That real yields are moving higher means that it’s not just the inflation and oil prices move … the market is asking a higher premium to invest in long-dated Treasuries,” said Charles-Henry Monchau, chief investment officer at Syz Group.
Lower crude oil prices weighed on energy shares and they were down 0.8 per cent, while the utilities sector, often considered a bond proxy, fell 1.3 per cent.
Healthcare stocks rose 0.6 per cent and were the least hit among the major S&P 500 sectors.
The Labor Department’s report showed the number of Americans filing new claims for unemployment benefits rose moderately last week, while layoffs declined in September, pointing to still-resilient labour market conditions.
Following a mixed jobs reports earlier this week, focus will be on the more comprehensive September non-farm payrolls data on Friday.
In early trading on Thursday, the Dow Jones Industrial Average was down 62.18 points, or 0.19 per cent, at 33,067.37, the S&P 500 was down 11.04 points, or 0.26 per cent, at 4,252.71, and the Nasdaq Composite was down 35.03 points, or 0.26 per cent, at 13,200.98.
Traders put the chance of interest rates remaining unchanged in November and December at 80 per cent and 63 per cent, respectively, according to CME’s FedWatch tool.
Federal Reserve policymakers including Minneapolis’ Neel Kashkari, Richmond’s Thomas Barkin, San Francisco’s Mary Daly and Vice Chair for Supervision Michael Barr are set to speak during the day.
The race to replace ousted House Speaker Kevin McCarthy took shape on Wednesday as Steve Scalise, the chamber’s No. 2 Republican, and Jim Jordan, a leading antagonist of Democratic President Joe Biden, said they would seek the post.
Among stocks, Clorox fell 6.2 per cent as the cleaning products maker said it expects to post a first-quarter loss.
Rivian Automotive dropped 15.7 per cent after the EV maker said it plans to sell convertible green bonds worth $US1.5 billion ($A2.4 billion) and forecast quarterly revenue to rise in line with estimates.
VinFast gained four per cent after the Vietnamese EV maker reported third-quarter revenue that more than doubled.
Dell Technologies said it expects compounded annual revenue growth of 3 per cent to 4 per cent over the long term. Shares of the PC maker were down 1.2 per cent.
Lamb Weston Holdings rose 11 per cent after the frozen potato products supplier raised its annual profit and sales forecast.
Declining issues outnumbered advancers for a 1.50-to-1 ratio on the NYSE and a 1.22-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and 12 new lows, while the Nasdaq recorded 15 new highs and 106 new lows.