Wall St falls on concerns over Fed interest rate path

US stocks were lower for a fourth straight session on Thursday as economic data did little to change investors' perceptions that the Federal Reserve would continue raising interest rates for longer than previously thought.

Equities had initially moved higher upon the release of the Fed's policy statement on Wednesday, which seemed to confirm hopes the Fed would begin to decelerate the size and speed of its path of interest rate hikes.

But comments from Fed Chair Jerome Powell following the statement that it was "very premature" to be thinking about pausing its rate hikes sent stocks lower as bond yields and the US dollar rose, a pattern that extended into Thursday.

Economic data on Thursday showed a labor market that continues to stay strong, although a separate report showed growth in the services sector slowed in October.

"One key takeaway from yesterday was what matters is the ultimate level of rates and how long we stay there, those are to be determined, we are going to figure those out along the way," said Brad Conger, deputy chief investment officer at Hirtle Callaghan & Co in West Conshohocken, Pennsylvania.

"The bad news for stocks is obviously we are going to have to contend with more rate hikes than we thought."

The Dow Jones Industrial Average fell 24.21 points, or 0.08%, to 32,123.55, the S&P 500 lost 20.53 points, or 0.55%, to 3,739.16, and the Nasdaq Composite dropped 119.76 points, or 1.14%, to 10,405.04.

While traders are roughly evenly split between the odds of a 50 basis-point and 75 basis-point rate hike in December, the peak Fed funds rate is seen climbing to at least 5%, compared with a prior view of 4.50%-4.75% rise. 

Investors will closely eye the nonfarm payrolls report due on Friday for signs the Fed's rate hikes are beginning to have a notable impact on slowing the economy.

The climb in yields weighed on megacap growth companies such as Apple Inc AAPL.O, down 3.59% and Alphabet Inc GOOGL.O which was down 3.20%. This in turn pulled down the technology and communication services sectors as the worst-performing in the session.

The Dow was able to hold near the unchanged mark thanks to gains in industrials including Boeing Co, up 6.68%, and heavy equipment maker Caterpillar Inc, which gained 2.85%.

Qualcomm Inc and Roku Inc lost 6.48% and 1.96%, respectively, after their holiday quarter forecasts fell below expectations.

With roughly 80% of S&P 500 having reported earnings, the expected growth rate is 4.7%, according to Refinitiv data, up slightly from the 4.5% at the start of October.

Declining issues outnumbered advancing ones on the NYSE by a 1.44-to-1 ratio; on Nasdaq, a 1.36-to-1 ratio favored decliners.

The S&P 500 posted 6 new 52-week highs and 44 new lows; the Nasdaq Composite recorded 57 new highs and 261 new lows.