Stocks fell on Thursday amid a sell-off of bank and other financial stocks as market participants grapple with the possibility of higher-for-longer interest rates. Investors also braced for February's key employment report due out Friday morning. The Dow Jones Industrial Average dropped over 500 points, while the S&P 500 Index and Nasdaq Composite lost 1.8% and 2%, respectively.

Here's how the market settled on Thursday:

S&P 500 Index (SPY  ): -1.85% or -73.69 points to 3,918.32

Dow Jones Industrial Average (DIA  ): -1.66% or -543.54 points to 32,254.86

Nasdaq Composite Index (QQQ  ): -2.05% or -237.65 points to 11,338.35

Thursday's losses pulled the Dow to close below its 200-day moving average for the first time since November 9, bringing its year-to-date losses to 2.7%. The S&P 500 and Nasdaq, however, are still positive for the year, up 2% and 8%, respectively.

Taking centerstage on Thursday, SVB Financial (SIVB  ) cratered over 60% on Thursday after the company announced a plan to raise more than $2 billion in capital to help offset losses from bond sales. Separately, Silvergate Capital (SI  ) shares plummeted over 42% following its announced plans to liquidate and wind down its operations.

These losses pulled the S&P 500 financial sector (XLF  ) down over 4% for its worst day since June 2020 as other bank and financial stocks were pulled lower on Thursday. The top U.S. banks JPMorgan (JPM  ), Bank of America (BAC  ), Wells Fargo (WFC  ) and Citigroup (C  ) all underperformed the broader market.

Earlier in the session, investors were met with some encouraging labor market news, with initial filings for unemployment totaling a more-than-expected 211,000 for the week ended March 4, an increase of 21,000 from the previous period. This was the highest total of 2023.

Thursday's session follows two eventual days of testimony from Federal Reserve Chair Jerome Powell, where he suggested the central bank will continue to raise rate higher than previously forecasted in response persistently high inflation.

Looking ahead, all eyes will be on February's jobs report. Economists expect non-farm private payrolls to grow by 225,000 last month, far below January's stronger-than-expected print of 517,000. The U.S. unemployment rate is also expected to remain the same at 3.4%.