NEW YORK >> Stocks fell today after reports suggested the U.S. job market remains much more resilient than expected.

The S&P 500 lost 35.23, or 0.8%, to 4,411.59. The Dow Jones Industrial Average dropped 366.38, or 1.1%, to 33,922.26, and the Nasdaq composite gave up 112.61, or 0.8%, to 13,679.04.

While a sturdy labor market keeps the economy out of a long-feared recession, it could also push the Federal Reserve to keep interest rates higher for longer in its campaign to defeat high inflation. That in turn could mean more pressure down the line on the economy and financial markets.

A report from ADP Research Institute suggested hiring by private employers was much stronger last month than economists expected, with nearly twice as many jobs created than forecast.

The ADP report can be volatile and “isn’t necessarily a good predictor of the monthly jobs report” that is more comprehensive and due from the U.S. government on Friday, said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office.

But it also paired with a separate report showing the number of U.S. workers applying for unemployment last week remains low relative to history, even if it was a bit higher than expected.

Other reports today offered a nuanced picture. One said employers advertised fewer job openings in May than expected. That could mean less upward pressure on inflation. A separate report meanwhile said growth in U.S. services industries remains hot and accelerated in June.

Friday’s jobs report will likely have a much bigger impact on Wall Street than anything else this week. If it’s strong like the ADP report, it could mean counterintuitive pain for stocks because it would push the Fed to keep the brakes on the economy in hopes of getting inflation under wraps. That would raise the risk of a recession later on, even if the strong job market is what’s preventing a downturn at the moment.

“Whether it’s that big of a number” as what the ADP report suggested “or even half of that, it would still be showing that the labor market is very strong and the Fed has not done enough to get inflation down,” said Megan Horneman, chief investment officer at Verdence Capital Advisors.

“Even with some of this nuanced economic data, the bottom line is the labor market is always a lagging indicator” and later to crack under the weight of higher interest rates than other parts of the economy, she said. “We still expect the labor market to get weaker.”

She expects a recession to hit within the next 12 months.

Yields jumped in the bond market as traders ramped up bets for the Fed to keep rates higher for longer than previously expected. Hopes for a potential cut to interest rates by early next year diminished.

The yield on the 10-year Treasury rose to 4.03% from 3.94% late Wednesday. It helps set rates for mortgages and other important loans.

The two-year Treasury yield, which moves more on expectations for the Fed, climbed to 4.99% from 4.95%. It’s back to where it was in early March, before the failures of several U.S. banks rattled confidence across financial markets.

Those collapses were caused in part by all the rate hikes the Federal Reserve has piled on since early last year. It’s raised its federal funds rate by a mammoth 5 percentage points from virtually zero to try to smother the worst inflation in decades. High interest rates work by slowing the entire economy, and unanticipated cracks often appear under pressure.

On Wall Street, Exxon Mobil was one of the heaviest weights on the market after it tumbled 3.7%. It warned of a hit to its profit during the spring because of changes in gas prices and industry margins, among other items.

JetBlue Airways sank 7.2% after it said it will end a partnership with American Airlines in the northeastern United States after losing a court fight over the deal. JetBlue will focus instead on salvaging its proposed purchase of Spirit Airlines. American Airlines fell 2.4%.

Meta Platforms, the parent company of Facebook, Instagram and WhatsApp, wavered between small gains and losses after unveiling its new app Threads, a rival to Twitter, which has had a bumpy ride under new owner Elon Musk. Meta ended the day down 0.8%.

Stock markets abroad also fell sharply.

China’s market has been under particular pressure as the recovery for the world’s second-largest economy sputters following the removal of anti-COVID restrictions. Tensions between China and the United States have also weighed on the market, and U.S. Treasury Secretary Janet Yellen visited China today attempting to improve relations.

Hong Kong’s Hang Seng index dropped 3%, partly due to sharp drops for Chinese banks shares after Goldman Sachs downgraded them, citing concerns about the slowing economy and lenders’ exposures to debt. Stocks in Shanghai fell 0.5%.

Japan’s Nikkei 225 dropped 1.7% after being one of the world’s stars through the first half of the year.

In Europe, France’s CAC 40 tumbled 3.1% and Germany’s DAX lost 2.6%.