The Russell 2000, an index of smaller stocks that have heavy exposure to the US economy, turned negative for 2018 for the first time. The S&P 500 declined by 0.5% after gaining 1.2% during the session.
It follows the Dow's almost 1,200 point slide Monday, 500 point rebound Tuesday, and mild 19 point drop Wednesday.
The S&P closed below the intraday low it had hit on Tuesday, a key level traders had been watching.
The S&P 500's market value surged $6 trillion between President Trump's election and the all-time high on January 26.
"The dust hasn't settled yet, and I think both buyers and sellers are trying to figure out what this market really wants to do", said Jonathan Corpina, senior managing partner for Meridian Equity Partners in NY. The prompt futures contract is trading well above those for delivery further in the future.
The retreat in equities had been long awaited by investors as the market climbed to record high after record high with few bumps.
The correction could be a buy signal for this stock. Rosenberg cited how bonds rallied during the financial crisis in 2008 when the market fell and during other big corrections.
Fears of contagion risk subsequently spread to equity markets last week as higher-than-expected USA wage growth figures added to concerns the Federal Reserve may have to raise rates further and more aggressively than forecast.
"I can not tell you how rare a market condition this is - that yields are rising into this risk pullback", he wrote in a note to clients Friday.
Earlier on Thursday, the 10-year U.S. Treasury note yield rose as high as 2.884 percent, just below Monday's four-year peak of 2.885 percent, after the Bank of England said interest rates probably needed to rise sooner than previously expected.
US stocks opened lower on Wednesday with the Dow Jones Industrial Average falling over 120 points as an nearly 2 percent gain in the previous session failed to calm the nerves following the blue-chip index's biggest intraday fall on Monday.
The Dow's 1,175-point drop MOnday erased the gains the index had made this yea, although it still ended the day 20 percent higher than a year ago.
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Defensive sectors utilities and real estate lagged, while technology and consumer discretionary were among the top-performing sectors. All 30 of the blue-chip Dow industrial components finished negative.
The sell-off wiped out the Dow and S&P 500 gains for the year, and left the Nasdaq barely in positive territory for 2018.
After regular cash trading, S&P 500 e-mini futures edged down 0.2 percent late on Thursday. Crude slumped 3 percent on Friday and slipped below $60 a barrel for the first time this year.
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Investors are weighing whether the sharp swings are the start of a deeper correction or just a temporary bump in the prolonged bull market. But stocks weren't the only group that suffered this week, as dollar-denominated gold and oil prices endured their worst weekly losses in two months and two years, respectively.
"It doesn't look like people are working their orders - the programs are trading this", Dan Ryan, who works on the New York Stock Exchange floor for E&J Securities, said as he was leaving work for the day.
"Investors are nervous about three things", said Larry Hatheway, an economist and Zurich-based asset manager.
Thursday marked another session this week with strong volume.
About 9.1 billion shares changed hands in U.S. exchanges, compared with the 8 billion daily average over the last 20 sessions.
Declining issues outnumbered advancing ones on the NYSE by a 8.64-to-1 ratio; on Nasdaq, a 6.92-to-1 ratio favored decliners.
Eight stocks fell for every one that rose on the New York Stock Exchange, and 490 of the companies in the S&P 500 took losses.
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