Concerns about a possible quicker pace to interest rate increases put stocks into a down draft that continued into Thursday.
Dow Jones futures were down by 0.34%. The S&P 500 fell 0.14% and the Nasdaq Composite was off 0.43%.
“I anticipate further gradual increases in the policy rate will be appropriate to both sustain a healthy labor market and stabilize inflation around our 2 percent objective," said Fed Governor Randal Quarles overnight in Tokyo. “The U.S. economy appears to be performing very well and, certainly, is in the best shape that it has been in since the crisis and, by many metrics, since well before the crisis."
The Dow surged more than 300 points after the release of the Fed’s minutes from the January meeting, but the drop in equities late in Wednesday’s session coincided with a spike in the benchmark 10-year Treasury yield, which hit a new four-year high of 2.957%. Yields rise as bond prices fall.
The Dow Jones Industrial Average fell 166.97 points, or 0.67%, to 24,797.78. The S&P 500 lost 14.93 points, or 0.55%, to 2,701.33. The Nasdaq Composite retrested 16.08 points, or 0.22%, to 7,218.23.
“What I do not want to see is the market retesting the lows from the bounce back day of that horrible week on 2/9,” said Melissa Armo of The Stock Swoosh. “If we go down there again I'm not feeling warm and snuggly that we hold and it may really create some selling pressure on the market with fears of rate hikes too quickly in 2018.”
In Europe, London’s FTSE, France’s CAC and Germany’s DAX all opened lower. London was down more than 1% after UK economic growth was revised lower. Selling accelerated in Frankfurt after the German business confidence index fell more than expected in February.
Asian markets were concerned about more interest rate hikes in the U.S.
Japan's Nikkei shed 1.1 percent, shares of office equipment maker Ricoh fell more than 5 percent on news it was conducting impairment tests.
Chinese markets returned to action, coming back from their long holiday break. The Shanghai Composite index was up 69.57 points or 2.17 percent at 3,268.73, its best single-day gain since August 2016.
On the economic calendar, market watchers will get the latest U.S. unemployment data with the release of the weekly jobless claims report.