Dow sell-off intensifies, drops 500 points on economic worries: Live updates

The stock market tumbled on Thursday as fresh data stoked fears over a possible recession reversing momentum from earlier in the week.

The Dow Jones Industrial Average dropped 532 points, or 1.3%. The S&P 500 shed 1.2%, while the Nasdaq Composite slipped 1.8%. The Russell 2000 index, the small-cap benchmark that’s rallied lately, dropped 2.8%.

Initial jobless claims rose to 249,000 last week, higher than a Dow Jones forecast of 235,000 and the most since August 2023. The ISM manufacturing index came in at 46.8%, worse than expected and a signal of economic contraction.

The 10-year Treasury yield broke below 4% for the first time since February.

That weak data comes a day after the Federal Reserve chose to keep rates at the highest levels in two decades. Chair Jerome Powell did give some investors hope by signaling a September rate cut is on the table.

“The economic data keep rolling on in the direction of a downturn, if not recession, this morning,” said Chris Rupkey, chief economist at FWDBONDS. “The stock market doesn’t 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.”

Stocks that would suffer the most under a recession were among the biggest lowers, including JPMorgan Chase, which lost 2%, and Boeing, which fell more than 5%.

Stocks began the day on a high note, as Meta Platforms rallied more than 5.5% on stronger-than-expected second-quarter results and upbeat guidance. But Meta was one of the few stocks in the green as the trading day went on. Even big tech stocks like Nvidia were feeling the pain with the AI chip leader off 3%.