The S&P 500 fell on Thursday as investors weighed the latest changes in rates

U.S. stocks looked on Thursday as traders weighed sharp swings in stocks and rates to start the month.

The S&P 500 fell 0.7%, while the Nasdaq Composite fell 0.6%. The Dow Jones Industrial Average lost 237 points, or 0.8%. Three stock criteria cut the session short. All major averages are on pace to end the week 5% higher.

Energy was the best performing sector, gaining 1.2%. Utilities lagged behind, falling more than 1%.

The benchmark 10-year rate rose 2 basis points to 3.785%. The 2-year yield, which is more sensitive to monetary policy changes, rose 3 basis points to 4.18%.

Wall Street started the week higher, with the S&P 500 staging its biggest two-day rally since 2020. Shares struggled to continue Wednesday’s gains, but eventually fell. The Dow was down about 42 points, or 0.14%. The S&P 500 and Nasdaq Composite fell 0.20% and 0.25%, respectively.

“While some believe the recent move is more than a bear market rally, there are doubts about the durability,” said Mark Hackett, president of Nationwide Investment Research. “Confidence remains weak among CEOs, small businesses, consumers and investors alike. Global pessimism is favorable from a contrarian perspective, although the timing of the pendulum swing is difficult to predict.”

Investors continue to monitor economic data to see if inflation is cooling or if the Federal Reserve’s rate hikes are pushing the U.S. closer to recession.

Data from ADP showed that the labor market among private firms remained strong as firms added 208,000 jobs in September. That beat the Dow Jones estimate of 200,000 jobs. On Friday, the Bureau of Labor Statistics’ September jobs report will be released, providing another set of data for the Fed and investors.

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