US equity indexes fell while most government bond yields rose in midday trading Thursday as investors weighed the labor market data alongside an evolving tariffs landscape.

The Nasdaq Composite slumped 2.4% to 18,103.1, the S&P 500 slid 1.9% to 5,733.4, and the Dow Jones Industrial Average was 1.2% lower at 42,490.3. Real estate, consumer discretionary, and technology led the steepest decliners, with all sectors down intraday.

Trump could defer his 25% tariffs on Canada and Mexico for all goods and services covered by a trade agreement known as USMCA, a Bloomberg news report said Thursday, citing Commerce Secretary Howard Lutnick. Trump will decide Thursday on the scope of a one-month exemption on 25% tariffs imposed this month, Lutnick said in an interview with CNBC. "I think it's likely it will cover all USMCA-compliant goods and services," he said.

The exemption would last until April 2, when Trump expects to enact a fresh round of tariffs, including "reciprocal" duties on countries globally and sector-specific ones such as automobiles, pharmaceuticals, and semiconductor imports.

The CBOE's volatility index VIX, known as the fear gauge, jumped 6.3% to 23.25.

In economic news, US layoff plans increased to 172,017 jobs in February, the highest monthly total since July 2020, driven by government sector cuts, outplacement firm Challenger, Gray & Christmas said Thursday.

US initial jobless claims fell to 221,000 in the week ended March 1 from 242,000, compared with expectations for a decrease to 233,000 in a survey of analysts compiled by Bloomberg.

Most US Treasury yields rose intraday, with the 10-year up 5.4 basis points to 4.32% intraday.