NEW YORK (AP) — Wall Street’s euphoria took a break yesterday, as steep losses in technology stocks dragged the rest of the market down with them.

It was the biggest decline for the US stock market since early June, when investors were dealing with a surge of coronavirus infections in places like Florida, Texas and Arizona. There seemed to be no explicit catalyst for the sell-off, with economic data coming in roughly where the market had expected and no companies issuing foreboding warnings.

That said, the market felt due for a breather, investors said. Both the S&P 500 and Nasdaq hit record highs just the day before. Prior to yesterday, the S&P 500 had risen nine out of the previous 10 days.

Big tech stocks like Apple, Amazon and Facebook have made massive gains this year. Investors have been betting those companies would continue posting huge profits as people spend even more time online with their devices. Market watchers have been questioning recently whether those gains were overdone. Apple is still up 64.7 per cent for the year, and Amazon is up 82.3 per cent

The Government reported that the number of Americans who applied for unemployment benefits fell last week to 881,000, slightly better than what economists had expected. That said, companies are still letting workers go at numbers well above those seen in the Great Recession, meaning the jobs picture remains still extremely bleak despite recent improvements.

The stock market has rallied this spring and summer after plunging in March as investors realised the economic toll the coronavirus pandemic was going to cause. Most of the rally has been on strong performances from tech stocks, but also a hope that the worst of the pandemic is in the past, despite rising infections in schools and the possibility of a second surge of infections in the fall. Huge amounts of support from the Federal Reserve and Congress have also helped bolster the economy.

Economists surveyed by FactSet forecast that the US economy created 1.4 million jobs in August, but that would be down from 1.74 million jobs in July. Tens of millions of Americans remain unemployed, however, as seen by this week’s unemployment benefits numbers.

If the jobs numbers do not deliver, it’s unlikely the stock market will rally much higher from here, analysts said.

The Dow Jones Industrial Average fell 807.77 points, or 2.8 per cent, to 28,292.73. It was briefly down 1,000 points earlier.

The S&P 500 index lost 125.78 points, or 3.5 per cent, to close as 3,455.06. The technology-heavy Nasdaq dropped 598.34 points, or 5 per cent, to 11,458.10.

Technology stocks, which account for a significant chunk of the US stock market’s value these days, fell broadly. Apple dropped 8 per cent, Amazon lost 4.6 per cent and Facebook gave back 3.8 per cent.