The Dow Jones Industrial Average slid 280.82 points or 1.05 per cent to 26 547.57. The S&P 500 was down 28.01 points or 0.96 per cent to 2 897.50 Xinhua news agency reported.
The Nasdaq Composite Index fell 136.59 points or 1.70 per cent to 7 888.50.
The US benchmark 10-year Treasury note yield reached its highest level since 2011 on Thursday. It broke above 3.2 per cent before trading round 3.198 per cent.
Meanwhile the 30-year Treasury bond yield broke a new high since 2014.
A higher yield can damp enthusiasm for stocks as it offers higher returns for income-seeking investors without the risk or volatility that can come with equities analysts said.
The bond rates surge started on Wednesday boosted by the better-than-expected economic data.
US private sector employment increased by 230 000 jobs from August to September well above the market expectations of 185 000 according to research institute ADP s National Employment Report on Wednesday.
Thursday s jobless claims filing also provided a new boost in the bond market.
In the week ending September 29 US initial jobless claims registered 207 000 a decrease of 8 000 from the previous week s revised level the Department of Labor reported on Thursday.
--IANS pgh/
