Entering into Thursday morning the S&P 500 opened lower at 4,455.
The S&P 500 ended the session with losses of 0.70%, while the heavy-tech Nasdaq 100 dropped more than 1%, and the Dow Jones Industrial Average slumped 0.57%.
The Institute for Supply Management (ISM) said on Wednesday its non-manufacturing Purchasing Managers' Index rose to 54.5 last month against expectations of 52.5, while a gauge of prices paid by service-sector businesses for inputs increased.
The prospect of higher rates put particular pressure on growth stocks with the S&P 500 growth index underperforming the benchmark throughout the session. Equity investors were also reacting to rising yields in 10-year and the two-year U.S. Treasuries.
Of the S&P 500's 11 major industry sectors, growth-heavy technology was the biggest decliner, losing 1.4%, while defensive utilities led gains, up 0.2%. Energy was the only other gainer, up 0.1% with support from higher oil prices.
