Stock market today: Dow drops 600 on weak jobs data as a global sell-off whips back to Wall Street

NEW YORK (AP) — Stocks tumbled Friday on worries the U.S. economy could be cracking under the weight of high interest rates meant to whip inflation. The S&P 500 fell 1.8% Friday for its first back-to-back loss of at least 1% since April. The Dow Jones Industrial Average lost 1.5%, and the Nasdaq composite fell 2.4%. A report showing hiring by U.S. employers slowed last month by much more than expected sent fear through markets. Intel sank to its worst day in 50 years after reporting weaker-than-expected profits and suspending its dividend. Treasury yields tumbled as expectations built for how deeply the Federal Reserve will cut rates in September.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) — Stocks are tumbling Friday on worries the U.S. economy could be cracking under the weight of high interest rates meant to whip inflation.

The S&P 500 was sinking by 2.1% in afternoon trading. The Dow Jones Industrial Average was down 775 points, or 1.9%, with a little more than an hour remaining in trading, and the Nasdaq composite was 2.6% lower as a sell-off for stocks whipped all the way around the world back to Wall Street.

A report showing hiring by U.S. employers slowed last month by much more than economists expected sent fear through markets, with both stocks and bond yields dropping sharply. It followed a batch of weaker-than-expected reports on the economy from a day earlier, including a worsening for U.S. manufacturing activity, which has been one of the areas hurt most by high rates.

It was just a couple days ago that U.S. stock indexes jumped to their best day in months after Federal Reserve Chair Jerome Powell gave the clearest indication yet that inflation has slowed enough for cuts to rates to begin in September.

Now, worries are rising the Fed may have kept its main interest rate at a two-decade high for too long. A rate cut would make it easier for U.S. households and companies to borrow money and boost the economy, but it could take months to a year for the full effects to filter through.

“The Fed is seizing defeat from the jaws of victory,” said Brian Jacobsen, chief economist at Annex Wealth Management. “Economic momentum has slowed so much that a rate cut in September will be too little and too late. They’ll have to do something bigger than” the traditional cut of a quarter of a percentage point ”to avert a recession.”

Traders are now betting on a nearly three-in-four chance that the Fed will cut its main interest rate by half a percentage point in September, according to data from CME Group. That's even though Powell said Wednesday that such a deep reduction is “not something we're thinking about right now.”

Of course, the U.S. economy is still growing, and a recession is far from a certainty. The Fed has been clear about the tightrope it's walking since it started hiking rates sharply in March 2022: Being too aggressive would choke the economy, but going too soft would give inflation more oxygen and hurt everyone.

While refusing to claim victory on either the jobs or the inflation fronts on Wednesday, before the discouraging economic reports hit, Powell said Fed officials “have a lot of room to respond if we were to see weakness” in the job market after hiking its main rate so high.

“Certainly today’s job data feeds the weakening economy narrative, but I believe the market is overreacting at this point and pricing too much in on rate cuts at this stage,” said Nate Thooft, senior portfolio manager at Manulife Investment Management. “Yes, the economy is weakening, but I am not convinced there is enough evidence that the data so far is a death knell for the economy.”

U.S. stocks had already appeared to be headed for losses Friday before the disappointing jobs report thudded onto Wall Street.

Several big technology companies turned in underwhelming profit reports, which continued a mostly dispiriting run that began last week with results from Tesla and Alphabet.

Amazon fell 9.2% after reporting weaker revenue for the latest quarter than expected. The retail and tech giant also gave a forecast for operating profit for the summer that fell short of analysts’ expectations.

Intel dropped even more, 26.7% and on pace for its worst day in 50 years, after the chip company’s profit for the latest quarter fell well short of forecasts. It also suspended its dividend payment and said it expects to lose money in the third quarter, when analysts were expecting a profit.

Apple was holding steadier, up 2.2%, after reporting better profit and revenue than expected.

Apple and a handful of other Big Tech stocks known as the “ Magnificent Seven ” have been the main reasons the S&P 500 has set dozens of records this year, in part on a frenzy around artificial-intelligence technology. But their momentum turned last month on worries investors had taken their prices too high and expectations for future growth are too difficult to meet.

Friday's losses for tech stocks dragged the Nasdaq composite down by more than 10% from its record set in the middle of last month.

Helpfully for Wall Street, other areas of the stock market beaten down by high interest rates had been rebounding last month when tech stocks were regressing, particularly smaller companies. But they tumbled too Friday on worries that a fragile economy could undercut their profits.

The Russell 2000 index of smaller stocks dropped 3.6%, more than the rest of the market.

In the bond market, Treasury yields fell sharply as traders raised their expectations for how deeply the Federal Reserve would have to cut interest rates. The yield on the 10-year Treasury fell to 3.79% from 3.98% late Thursday and from 4.70% in April.

In stock markets abroad, Japan’s Nikkei 225 dropped 5.8%. It's been struggling since the Bank of Japan raised its benchmark interest rate on Wednesday. The hike pushed the value of the Japanese yen higher against the U.S. dollar, potentially hurting profits for exporters and deflating a boom in tourism.

Chinese stocks fell week as investors registered disappointment with the government’s latest efforts to spur growth through various piecemeal measures, instead of hoped-for infusions of broader stimulus, while stock indexes dropped by more than 1% across much of Europe.

Commodity prices have also had a rough ride this week. Oil prices surged after the killings of leaders of Hamas and Hezbollah that fueled fears that a widening conflict in the Middle East could disrupt the flow of crude.

But prices fell back Thursday and Friday on worries that a weakening economy will burn less fuel. A barrel of benchmark U.S. crude tumbled back below $74 Friday after coming into the week above $77.

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

A trio of traders work on the floor of the New York Stock Exchange, Friday, Aug. 2, 2024. (AP Photo/Richard Drew)

Traders gather at the post of specialist Stephen Naughton, right,on the floor of the New York Stock Exchange, Friday, Aug. 2, 2024. (AP Photo/Richard Drew)

Trader John Romolo works on the floor of the New York Stock Exchange, Friday, Aug. 2, 2024. (AP Photo/Richard Drew)

Specialist James Denaro works at his post on the floor of the New York Stock Exchange, Friday, Aug. 2, 2024. (AP Photo/Richard Drew)

FILE - People pass the New York Stock Exchange on July 31, 2024 in New York. World shares have tumbled on Friday, August 2, 2024, with Japan's Nikkei 225 index slumping 5.8% as investors panicked over signs of weakness in the U.S. economy.(AP Photo/Peter Morgan, File)

A person walks in front of an electronic stock board showing Japan's Nikkei 225 index Friday, Aug. 2, 2024, in Tokyo. Shares in Europe and Asia tumbled Friday, with Japan’s Nikkei 225 index slumping 5.8% as investors panicked over signs of weakness in the U.S. economy. (Kyodo News via AP)

A person walks in front of an electronic stock board showing Japan's Nikkei 225 index Friday, Aug. 2, 2024, in Tokyo. Shares in Europe and Asia tumbled Friday, with Japan’s Nikkei 225 index slumping 5.8% as investors panicked over signs of weakness in the U.S. economy. (Kyodo News via AP)

A currency trader passes by the screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Aug. 2, 2024. (AP Photo/Ahn Young-joon)

Currency traders watch monitors near the screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Aug. 2, 2024. (AP Photo/Ahn Young-joon)

An electronic stock board shows that Nikkei stock average dropped over 1,900 Japanese yen from previous day, in Tokyo Friday, Aug. 2, 2024. (Kyodo News via AP)

A currency trader watches monitors near the screen showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Aug. 2, 2024. (AP Photo/Ahn Young-joon)

People pass by an electronic stock board in Tokyo Friday, Aug. 2, 2024. (Kyodo News via AP)

The New England Patriots showed in Week 2 why they are sticking with Jacoby Brissett at quarterback over first-round draft pick Drake Maye.

Not because Brissett is moving the offense with his arm, or even his legs.

But because it’s not yet safe for Maye to line up behind the Patriots’ offensive line.

Brissett was sacked three times and hit a handful of others in the 23-20 overtime loss to the Seattle Seahawks on Sunday. One left the caretaker quarterback favoring his shoulder, another twisted his knee.

And the Patriots have invested too much in Maye — the No. 3 overall pick in the draft — to put the former North Carolina star at risk.

“You never want your quarterback to get hit,” coach Jerod Mayo said. “We have to do a better job with our pass (protection) up front, and we have to keep him clean. Because even when he’s not getting hit, or any quarterback, if they’re back there and they feel people around him, it always is going to affect you a little bit.”

Although the Patriots came into the season with low expectations — they were the biggest underdog in the league in Week 1 — Brissett managed the offense well enough to come away with an upset of the Cincinnati Bengals. Mayo crowed that his offensive line had been unfairly maligned.

But the problems the blockers showed in the preseason — Brissett hurt his right shoulder in the finale against Washington — reappeared against the Seahawks.

One key turning point came after Antonio Gibson broke free for a 45-yard run to the Seattle 25 with about seven minutes left and New England holding a 20-17 lead. After two runs that took almost two minutes off the clock, Brissett was sacked for a 9-yard loss, dropping the Patriots from the 21 to the 30.

The 48-yard field goal attempt was blocked, setting the Seahawks up on a short field for the tying field goal that sent the game into overtime.

The defense — especially the run defense — has been solid. The Seahawks managed just 46 yards on 19 carries.

The passing game has been slow to develop over the first two games, with Brissett totaling 30 completions for 270 yards and one touchdown so far this season. He has thrown only one pass downfield, according to Sportradar — the fewest attempts of 20 or more yards in the league. Only the Commanders (0-2), the Panthers (0-6) and the Bears (0-10) also have failed to complete a deep pass.

Tight end Hunter Henry caught eight passes, matching a career high, for a personal-best 109 yards.

After managing the season opener well enough to beat the Cincinnati Bengals, Brissett completed just 15 of 27 passes for 149 yards.

Linebacker Ja'Whaun Bentley, a defensive captain, left the game in the first quarter with a shoulder injury. Center David Andrews missed practice on Monday with a hip injury.

19 – Brissett completed three passes for 19 yards to wide receivers in the game. It’s the eighth time since the merger that Patriots wide receivers have picked up fewer than 20 passing yards in a game. Brissett has two of them, also connecting with wide receivers for just 16 yards in a 16-0 loss to Buffalo on Oct. 2, 2016, the final game of Tom Brady’s Deflategate suspension.

The Patriots travel to the Meadowlands to play the Jets on Thursday night.

AP NFL: https://apnews.com/hub/nfl

New England Patriots place kicker Joey Slye, right, kicks a field goal in front of punter Bryce Baringer, left, in the first half of an NFL football game against the Seattle Seahawks, Sunday, Sept. 15, 2024, in Foxborough, Mass. (AP Photo/Charles Krupa)

New England Patriots head coach Jerod Mayo adjusts his microphone in the second half of an NFL football game against the Seattle Seahawks, Sunday, Sept. 15, 2024, in Foxborough, Mass. (AP Photo/Michael Dwyer)

New England Patriots running back Rhamondre Stevenson, right, celebrates after his touchdown with tight end Hunter Henry, left, in the second half of an NFL football game against the Seattle Seahawks, Sunday, Sept. 15, 2024, in Foxborough, Mass. (AP Photo/Charles Krupa)

New England Patriots quarterback Jacoby Brissett, left, and Seattle Seahawks quarterback Geno Smith, greet one another in the center of the field following an NFL football game, Sunday, Sept. 15, 2024, in Foxborough, Mass. (AP Photo/Charles Krupa)

New England Patriots quarterback Jacoby Brissett speaks with reporters following an NFL football game against the Seattle Seahawks, Sunday, Sept. 15, 2024, in Foxborough, Mass. (AP Photo/Michael Dwyer)

New England Patriots quarterback Jacoby Brissett (7) is brought down by Seattle Seahawks linebacker Boye Mafe, center, in the second half of an NFL football game, Sunday, Sept. 15, 2024, in Foxborough, Mass. (AP Photo/Michael Dwyer)

New England Patriots quarterback Jacoby Brissett, right, is brought down by Seattle Seahawks linebacker Boye Mafe, left, in the first half of an NFL football game, Sunday, Sept. 15, 2024, in Foxborough, Mass. (AP Photo/Charles Krupa)

New England Patriots quarterback Jacoby Brissett, right, is sacked by Seattle Seahawks defensive end Leonard Williams, center, in front of Patriots guard Michael Jordan, left, in the second half of an NFL football game, Sunday, Sept. 15, 2024, in Foxborough, Mass. (AP Photo/Charles Krupa)