A gauge of global stocks fell on Thursday from a record high in its biggest one-day decline in nearly three months as the technology sector sold off, while the dollar continued its bounce from more than two-year lows.
The S&P technology sector, up more than 35% on the year as the best-performing of the 11 major sectors through Wednesday, dropped 5.83% as investors fled expensive stocks that have pushed major averages higher. The group contains some of the world's largest publicly traded companies.
Investors have been concerned about the narrowing leadership of the market rally that pushed the S&P 500 up 60% from its March 23 low through Wednesday, with gains on Wall Street largely driven by names such as Apple Inc and Microsoft Corp.
"There was this chase to get long and people are jealous of the gains that they were missing out on and they just poured in," said Mike Zigmont, head of trading and research at Harvest Volatility Management in New York. "And eventually that behavior exhausts itself and what we're seeing is the exhaustion today." Signs the U.S. economy's rebound from coronavirus-driven lockdowns could be stalling in the absence of another round of fiscal stimulus also weighed.
While weekly initial jobless claims fell more than anticipated, they remained extremely high. In addition, the methodology used in the weekly report to address seasonal fluctuations has changed, which analysts said led to fewer claims than over the past two months.
Investors will closely watch Friday's August employment report for further signs of labor market stagnation.
Other data showed slower growth in the services sector last month, as the boost from fiscal stimulus and business reopenings faded, although it remained above the level signifying growth.