“The big picture concern is that wage growth will pick up and lead to more inflation,” said Nicholas Colas, co-founder at DataTrek Research.
The rise in bond yields “is certainly beginning to concern the markets. It is certainly now an issue, where it wasn’t for all of last year. Rates have risen fairly quickly this year and the speed of the advance is worrying.”
At 10:43 a.m. ET (1543 GMT), the Dow Jones Industrial Average was down 257.59 points, or 0.98 percent, at 25,929.12. The S&P 500 was down 21.38 points, or 0.75 percent, at 2,800.6 and the Nasdaq Composite was down 49.53 points, or 0.67 percent, at 7,336.33.
The CBOE Volatility Index, the most widely followed gauge measure of stock market volatility, rose to 14.48, after having fallen in the previous two sessions.
The U.S. stock market roared out of the blocks in 2018, before being reined in this week by rising bond yields. The S&P and the Dow are now on track to post their biggest weekly losses since 2016.
Adding to the pressure were disappointing earnings reports from major companies.
Shares of oil majors Exxon and Chevron were down 5 percent and 3.5 percent, respectively, after reporting lower-than-expected quarterly profits. [nL2N1PQ8QU]
Google-parent Alphabet fell 5.2 percent after its profit also misses analysts’ estimates.
Apple fell 2.5 percent as investors focused on the company’s muted forecast rather than strong iPhone prices and its cash plans.
One bright spot was Amazon, which rose 6.3 percent after the online retailer reported a record profit of near $2 billion due to strong sales and tax law changes.
The stock helped the consumer discretionary index rise 0.72 percent, the only gainer among the 11 major sectors.
Declining issues outnumbered advancers on the NYSE by 2,503 to 376. On the Nasdaq, 2,161 issues fell and 617 advanced.
The S&P 500 index showed 18 new 52-week highs and 18 new lows, while the Nasdaq recorded 34 new highs and 77 new lows.
(This story has been refiled to remove extraneous text from paragraph nine.)
(Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D’Souza)