NEW YORK, Sept. 3 (Xinhua) -- Wall Street's major averages plunged on Thursday, posting their worst session in months, as a broad sell-off in tech shares weighed on the market.
The Dow Jones Industrial Average dropped 807.77 points, or 2.78 percent, to finish at 28,292.73. The 30-stock index shed more than 1,000 points at its session low.
The S&P 500 closed down 125.78 points, or 3.51 percent, to 3,455.06. The Nasdaq Composite Index sank 598.34 points, or 4.96 percent, to 11,458.10.
The declines marked the biggest one-day drops for all three indexes since June.
U.S. mega-cap tech shares had a brutal day. Shares of Apple and Microsoft dived 8 percent and 6.2 percent, respectively, leading the laggards in the Dow.
Shares of other major U.S. tech giants including Amazon, Netflix and Google-parent Alphabet also declined noticeably.
The S&P 500 tech sector closed down 5.83 percent, notching its biggest one-day loss since March.
A slew of newly-released data failed to calm investors.
U.S. services Purchasing Managers' Index dropped to 56.9 percent in August from the July reading of 58.1 percent, the Institute for Supply Management reported on Thursday, indicating a slower pace of growth.
U.S. initial jobless claims, a rough way to measure layoffs, fell to 881,000 in the week ending Aug. 29, following an upwardly revised 1.01 million in the prior week, said the Department of Labor.
The drop in new claims mainly stemmed from a major change in seasonal adjustment methodology and the labor market showed little progress absent the change, according to analysts.
"It is sobering to think, four-months after the worst month of the Lockdown Recession, the number of people receiving assistance remains millions higher than at any time prior to the pandemic," Chris Low, chief economist at FHN Financial, said in a note commenting on the jobless claims data.
The Cboe Volatility Index, widely considered as the best fear gauge in the stock market, spiked 26.46 percent to 33.60.
The moves came after a strong rally on Wall Street, powered primarily by momentum in tech-related shares.
On Wednesday, the Dow jumped more than 450 points in its best day since mid-July. The S&P 500 and the Nasdaq both wrapped up the session at records, with the tech-heavy Nasdaq topping the 12,000 threshold for the first time.
Wall Street also had its best August in more than 30 years.
A large share of recent gains came from the top U.S. technology firms and tech has been untethered from fundamentals for a while, experts noted.
Currently the market cap of Facebook, Apple, Amazon, Microsoft and Google as a share of the S&P 500 is 24.8 percent, an all-time high, according to a research note by BofA Securities on Thursday.
Looking ahead, experts warned that uncertainty would remain on the market.
Mitch Zacks, CEO at Zacks Investment Management, said that while consumer and investor sentiment is improving from the pandemic low, it may sour as the election nears.
"We are not out of the woods, in fact quite the contrary," analysts at Bank of America said in a note Thursday.
"The months ahead of an election typically see a demonstrable increase in volatility; super accommodative policy is hitting some speed bumps -failure to pass more stimulus, proposed corporate tax hikes, etc., pose risks," they said, adding that possible virus resurgence is another concern.
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