All three Wall Street indexes closed in the red on Wednesday following rising expectations that interest rates will remain high for longer.
This follows data published in the New York session, showing the non-manufacturing PMI data of the US ISM survey rose to the highest level since February last month.
Analysts see the figures as showing that the US economy remains stronger than other G10 countries and has less risk of entering recession.
As a result, the market increased expectations that the Federal Reserve (Fed) interest rate will remain at the highest level for a longer period.
In addition, investors are also worried about rising oil prices, as higher energy costs may lead to inflation rising again thus forcing the Fed to raise interest rates again.
Following that expectation, the 10-year US treasury yield rose to a two-week high of 4.30% further weakening the stock market.
The Dow Jones Industrial Average fell 0.57% to 34,443.19, while the S&P 500 lost 0.70% to 4,465.48 and the Nasdaq Composite fell 1.06% to 13,872.47.
Apple came under pressure following reports that China had banned government employees from using iPhones, saw it drop 3.5%.
Meanwhile, Nvidia, down 3.2%, has also contributed to a strong pullback in the Nasdaq index.
