After a November rally built on optimism that the Federal Reserve will cut interest rates next year, this month has seen those positions unwinding on concerns the buying may have been overdone.

Data on Thursday from payrolls firm ADP showing a smaller-than-forecast rise in private sector jobs reinforced views that the labor market and economy were slowing as inflation comes down. Figures released Tuesday showed job openings were also falling.

That has fueled bets on the Fed slashing borrowing costs, with some saying as early as the first quarter -- even as bank officials say they are keeping the option of another hike on the table.

Decision-makers hold their next policy meeting next week, and that will be pored over for clues about their plans for 2024.

The sharp slowdown in jobs creation, however, is causing some concern.

"The slowdown in hiring continues and is becoming more obvious," said Peter Boockvar, author of the Boock Report.

"What I'm mostly focused on right now is the trajectory of activity — and all I see is slowing in multiple places, including now the labor market."

And SPI Asset Management's Stephen Innes said: "The US labor market is showing signs of contracting much faster than expected.

"This is not necessarily a 'risk-on' panacea, especially if the downward momentum in the jobs markets picks up a good head of steam."

All three main indexes on Wall Street ended in the red, and Innes added that the pullback from November may be down to a fear that rate cut expectations might have been overdone.

Traders are pricing more than one percentage point of cuts next year, he said.

"While the growth outlook has moderated in recent weeks... the economy does not appear to be heading for a recession in 2024, which -- despite progress on inflation -- might not compel the Fed to cut as aggressively as the current market pricing might suggest," he warned.

He said any hawkish turn from the Fed or a data shock could spark a heavy sell-off in markets.

With all eyes on Friday's crucial non-farm payrolls figures, Asian traders were taking cash off the table Thursday.

Hong Kong and Tokyo fell more than 1 percent each, while Shanghai, Sydney, Seoul, Singapore, Taipei, Wellington, Jakarta and Manila were also in the red.

Oil prices edged up in early business, though they made little headway into the near four percent losses seen Wednesday that put WTI below $70 for the first time since July.

Data pointing to a jump in US stockpiles compounded demand worries as economies slow, while traders remain skeptical that Saudi Arabia and its allies will stick to recently pledged deep output cuts.

Analysts have begun to consider the possibility that Riyadh could abruptly reopen the taps to maintain market share, similar to a move in 2014 to counter rising US production.