S&P 500, NASDAQ Pressured by Fed Rate Hike Fears Amid Hot US Labor Market

The main U.S. stock indexes are set to start Thursday's trading day down after a closely watched private sector employment data revealed further evidence of a robust labor market, igniting concerns that the Federal Reserve would continue raising interest rates for longer than anticipated.

The Dow Jones Industrial Average is at 32872.70 at 14:42 GMT, down 397.07 points or -1.19%. The NASDAQ Composite is trading at 10309.03, down 149.73 or -1.43%, while the S&P 500 Index is at 3807.02, down 45.25 or -1.17%.

ADP claims that in December, private payroll growth increased by 235,000.

Private payroll growth in the United States exceeded expectations in December, showing that there is still a significant demand for workers despite rising interest rates.

According to the ADP National Employment report released on Thursday, private employment climbed by 235,000 jobs in the last month. Unrevised data for November showed 127,000 new jobs gained. Reuters questioned economists, who predicted a 150,000 increase in private employment.

US Weekly Jobless Claims Reach Three-Month Low; December Saw Fewer Layoffs

Layoffs decreased 43% in December while the number of Americans submitting new unemployment benefit claims plummeted to a three-month low last week, indicating a strong job market that may need more interest rate increases from the Federal Reserve.

The Labor Department said on Thursday that initial applications for state unemployment benefits dropped 19,000 to a seasonally adjusted 204,000 for the week ending December 31, the lowest level since late September. 225,000 claims were predicted by economists surveyed by Reuters for the most recent week.