Stocks sold off Thursday, with the Dow Jones Industrial Average tumbling nearly 500 points, as investors\u2019 fears over a recession surfaced.<\/p>\n
The Dow dropped 494 points, or 1.2%. The S&P 500 shed 1.4%, while the Nasdaq Composite slipped 2.3%. The Russell 2000 index, the small-cap benchmark that has rallied lately, dropped 3%.<\/p>\n
Some fresh data raised the specter of an economic contraction and the notion that the Federal Reserve could be too late to start cutting interest rates. <\/p>\n
Initial jobless claims rose the most since August 2023. And the ISM manufacturing index, a barometer of factory activity in the U.S., came in at 46.8%, worse than expected and a signal of economic contraction.<\/p>\n
The 10-year Treasury yield broke below 4% for the first time since February in a sign that more investors were seeking safe-haven assets.<\/p>\n
That weak data comes a day after the Fed chose to keep rates at the highest levels in two decades. <\/p>\n
While Fed Chair Jerome Powell did give some investors hope by signaling a September rate cut was on the table, it was not enough for market participants Thursday. <\/p>\n
\u201cThe economic data keep rolling on in the direction of a downturn, if not recession, this morning,\u201d said Chris Rupkey, chief economist at FWDBONDS, a financial market research company. \u201cThe stock market doesn\u2019t know whether to laugh or cry because while three Fed rate cuts may be coming this year and 10-year bond yields are falling below 4.00%, the winds of recession are coming in hard.\u201d<\/p>\n
Shares in companies that would likely suffer the most during a recession saw some of the biggest declines, including JPMorgan Chase, which lost 2%, and Boeing, which fell more than 5%.<\/p>\n
Stocks began the day on a high note, as Facebook parent Meta Platforms rallied more than 4% on stronger-than-expected second-quarter results and upbeat guidance. <\/p>\n
But Meta was one of the few stocks in the green as the trading day went on.<\/p>\n
Even stocks such as Nvidia, which has soared for much of the year, were feeling the pain, with the artificial intelligence chip leader off 8% as investors overall may be taking some figurative chips off the table into what could be a more volatile time for the market with a November election around the corner. <\/p>\n
The S&P 500 is still up about 14% for the year, coming off its eighth-positive month in the last nine in July.<\/p>\n<\/p>\n
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