US stock and bond prices fell again today after the Labour Department said the economy continues to add jobs at a strong pace, and investors worried about a three-day surge in yields.
The Department of Labour said employers added significantly more jobs in July and August than it previously thought, which made up for a slightly disappointing gain in September. That was another sign economic growth is likely to continue.
While that is usually good news for stocks, the market stumbled this week as investors sold government bonds at a rapid pace.
That pushed yields to their highest levels in more than seven years, a sign that investors are unsure how high and fast interest rates will rise.
Kate Nixon, the chief investment strategist for Northern Trust Wealth Management, said the decline in stock and bond prices started with comments by Federal Reserve Chairman Jerome Powell on Wednesday.
In a moderated discussion, Mr Powell expressed confidence in the economy and said rising interest rates are a "long way" from holding back growth.
Ms Nixon said that means the Fed is intent on raising rates further, and investors are not sure when it intends to stop.
"The Fed is clearly no longer in the business of being accommodative and now the burden of proof is on the data to prove them wrong," she said.
The S&P 500 index lost 16.04 points, or 0.6%, to 2,885.57. The Dow Jones Industrial Average dipped 180.43 points, or 0.7%, to 26,447.05.
Technology and internet companies and smaller, more US-focused companies continued to suffer steep losses.
The Nasdaq composite skidded 91.06 points, or 1.2%, to 7,788.45. The Russell 2000 index lost 14.80 points, or 0.9%, to 1,632.11.
The Nasdaq dropped 3.2% this week and the Russell tumbled 3.8%. That was both indexes worst weekly loss in more than six months. The Russell index finished at its lowest level since late May.
The yield on the 10-year Treasury note jumped to 3.23%, its highest since May 2011, from 3.19%.
While technology companies and retailers have been the biggest gainers on the S&P this year, they took steep losses this week.
Banks and industrial and energy companies, which have struggled for most of 2018, changed place and finished with strong gains.