All three of the major indices sold off into the close on Thursday. The selling accelerated midday after Treasury Secretary Steven Mnuchin announced that he will not be traveling to Saudi Arabia to attend a summit known as “Davos in the Desert.”

“[It] highlights the escalating global tensions between world financial leaders and Saudi Arabia,” NYSE MAC Desk’s Robert Bohlert said in an email.

The S&P 500 (^GSPC) tumbled by 1.44%, or 40.43 points, while the Dow (^DJI) declined even further by 1.27%, or 327.23 points, as of market close on Thursday. The Nasdaq (^IXIC) sunk 2.06%, or 157.56 points.

“With the S&P closing down on eight of the past 10 trading days, traders continue to be wary of bounces,” said Dave Lutz, head of ETFs at JonesTrading.

Meanwhile, the yield on the benchmark 10-year Treasury note rose slightly to 3.18% back toward seven-year highs, while the yield on the 30-year note increased to 3.366% as of 4 p.m. ET.

Wall Street’s strategists seem to agree that the recent bout of market volatility is largely due to the rapid rise in long-term interest rates. But they also agree that the underlying fundamentals favor the bulls.

“The current buoyant US economic backdrop should continue to support US earnings and will more than compensate for the rise in US 10yr yields at least for the short term,” BNP Paribas strategists said on Thursday. “Whilst there could still be some further corrections we would view any near term equity corrections as a buying opportunity.”

ECONOMY: Initial jobless claims fall

Initial jobless claims fell by 5,000 to a seasonally adjusted 210,000 versus 215,000 from the week prior, according to the Labor Department.

Economists polled by Bloomberg were expecting 211,000 for the week ending October 13.

The number of Americans applying for unemployment benefits continues to hover near 45-year lows indicating a strong labor market.

Though it is too early to know the impact of Hurricane Michael on jobless claims, the initial claims that sprung up following the hurricanes in September have been reversing, according to Barclays.

“While we believe the storm did temporarily weaken some categories of employment, most notably leisure and hospitality, we continue to have a difficult time reconciling the stability of labor market conditions as indicated by jobless claims data and the slowing in September payroll growth…we look to next week’s report for any indication that the hurricane disrupted labor market conditions in Florida and Georgia,” Michael Gapen, Barclays chief US economist, said in a research note on Thursday.