By Yasin Ebrahim
Investing.com – The Dow fell sharply on Thursday, as a jolt of volatility swept through Wall Street amid a plunge in big tech stocks and mixed economic data.
The Dow Jones Industrial Average fell 2.86%, or 832 points, the S&P 500 was down 3.61%, while the Nasdaq Composite slumped 4.94%.
Tech stocks, which have led the recent market rally, demonstrated their hold over the market once again as a slide in mega-cap tech stalwarts prompted investors to cut their bullish bets on stocks.
Apple (NASDAQ:AAPL) fell nearly 7% to lead the move lower in the Fab 5 stocks, with Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) each down more than 4%.
A sharp rise in volatility also rattled investors, with the CBOE Volatility Index, the so-called fear index, surging 25% to a nearly two-month high.
Energy, meanwhile, was the only sector in the green even as oil prices struggled to turn positive as concerns over the strength of demand persist.
Better-than-expected jobs data and softer services growth did little to improve sentiment on the economic recovery a day ahead of the release of August's nonfarm payrolls report.
The ISM non-manufacturing index slowed to a reading of 56.9 last month, from 58.1 in July, missing economists' forecasts for a reading of 57.
"The August ISM Non-Manufacturing report showed a modest decline to 56.9 from 58.1. Technically, this is the lowest level since the index began to improve coming out of the COVID-induced lockdowns in the Spring, but 56.9 is still a very strong outright reading," Jefferies (NYSE:JEF) said.
The U.S. Department of Labor reported Thursday that initial jobless claims fell to 881,000 in the week ended Aug. 28, beating forecasts of 950,000.
In other news, Help desk software provider Pagerduty (NYSE:PD) saw its narrower-than-expected quarterly loss overshadowed by softer full-year guidance, sending its shares down 26%.