STORY: U.S. stocks fell sharply on Thursday as fresh evidence of a tight labor market deepened fears the Federal Reserve will keep interest rates elevated for longer than expected.
The Dow fell a percent. The S&P 500 ended more than a percent lower, while the Nasdaq lost nearly a percent and a half.
Labor data out Thursday showed a higher-than-expected rise in private employment last month and showed jobless claims fell last week, giving the Fed a reason to keep tightening financial conditions.
And Ross Mayfield, investment strategy analyst at Baird, said he also expects a strong non-farm payrolls report on Friday.
"I think you'll see jobs added. I think you'll see strong wage growth. I think you'll see an unemployment rate that's still sub-4%. And, you know, again, all that is incompatible with what the Fed wants to do. And every time a Fed governor or FOMC voter gets in front of a microphone, they're talking about the labor market and the imbalance they see there. I don't think that the non-farm payrolls report tomorrow is going to do anything to help there."
Among individual stocks, Tesla dropped almost 3% after December sales of its electric vehicles made in China fell to a five-month low.
Shares of Amazon also fell after the e-commerce giant announced that layoffs will now include more than 18,000 jobs as part of a workforce reduction it previously disclosed.
Shares of Walgreens Boots Alliance fell 6% after the drugstore chain posted a quarterly loss on an opioid litigation charge.
And shares of Bed Bath & Beyond plummeted, sinking nearly 30% after the company said it was exploring options to address plunging sales, including filing for bankruptcy.