The tech-heavy Nasdaq led losses, which caused investor concerns about the Federal ReserveFederal Reserve continuing its path of aggressive monetary policy tightening, as well as higher-than-expected job additions in November.
The Labor Department's jobs report showed non-farm payrolls rose by 263,000, compared with an estimated 200,000, as U.S. employers hired more workers than expected in November and raised wages despite mounting worries of a recession.
The U.S. unemployment rate was unchanged as expected.
James Knightley, chief international economist at ING, said that there needs to be more work done to get inflation under control, because of strong job creation and a big increase in wages.
Adding to the Fed's problems, monetary conditions have loosened in recent weeks as the dollar and longer-dated Treasury yields have fallen and credit spreads have narrowed. The Fed's recent rate rises are not helping the tightening effects of this. Knightley predicted further 50 basis point rate hikes in December and February, with the potential for tightening needing to go on for longer, he added.
The Federal Open Market Committee meets on December 13 -- 14 to discuss a volatile year that saw the central bank respond to the fastest inflation since the 1980s, with the fastest increase in interest rates since then to try to offset it.
The S&P 500 and the Nasdaq are on track to end the week higher after a rally on Wednesday sparked by Fed Chair Jerome Powell's comments on scaling back interest rates hikes as early as December.
The Dow Jones Industrial Average was down 313.86 points, or 0.91%, at 34,081. The S&P 500 was down 46.49 points, or 1.14%, at 4,030 on 15 September. The Nasdaq Composite was down 162.01 points, or 1.41%, at 11,320, on 08. All of the 11 major S&P 500 sectors declined in early trading.
Growth and technology companies such as Apple and Nvidia Corp fell 1.4% and 3.1% as Treasury yields recovered from multi-week lows that pressured the rate-sensitive megacap stocks.
The Semiconductor company, Marvell Technology Inc., fell 6.8% after quarterly earnings and revenue missed expectations.
Declining issues outnumbered advancers for a 5.14 -- 1 ratio on the NYSE and a 3.09 -- 1 ratio on the Nasdaq.
The S&P index recorded two new 52 week highs and no new lows, while the Nasdaq recorded 15 new highs and 40 new lows.