The Dow fell 200 points on fears that the Federal Reserve will overheat

Stocks fell on Thursday as investors grew increasingly concerned that the Federal Reserve will continue to raise interest rates despite signs of slowing inflation.

The Dow Jones Industrial Average lost 251 points, or 0.8%, erasing its gains in January. The S&P 500 and Nasdaq Composite fell 0.8% and 1.1%, respectively, and were still holding on to their monthly gains.

All major averages are on track for a negative week. The Dow Jones fell 3.5%, while the Standard & Poor’s and Nasdaq both lost more than 2% on a weekly basis.

Stocks extended their decline on Thursday after initial filings for unemployment insurance fell to their lowest level since late June last week The Labor Department reported Thursdayindicating to investors that the labor market is resilient amid a slowing economy.

“Despite all the post-pandemic layoffs, the job market remains hot,” said Ed Moya, senior market analyst at Oanda. “The labor market needs to collapse to allow the Fed to comfortably keep rates on hold.”

Claims totaled 190,000 seasonally adjusted for the week ending January 14, a decrease of 15,000 from the prior period. Economists surveyed by Dow Jones were looking for 215,000.

Investors have also sifted through the latest data and Federal Reserve remarks for clues about how interest rates will rise. But while the latest numbers point to declining inflation, JPMorgan Chase CEO Jamie Dimon thinks rates will exceed 5%.

“I think there’s a lot of underlying inflation out there, and it’s not going away that quickly,” Dimon told CNBC’s “Squawk Box” program from the World Economic Forum in Davos, Switzerland.

Wall Street is out of a losing session. The S&P 500 fell 1.56% on Wednesday, its worst day since December 15th. The Dow Jones lost more than 613 points, or 1.81%. The heavy Nasdaq Composite fell 1.24%, snapping seven straight days of gains. Bank stocks such as JPMorgan, Bank of America and Wells Fargo plunged, weighing on the broader market.

Disappointing retail sales and a weaker-than-expected PPI reading sparked recession fears, sending stocks lower on Wednesday.

Elsewhere, investors are watching key quarterly reports to see if there is a slump in earnings. Netflix will report earnings after the bell.