Wall Street stocks fell Thursday along with bond yields after further signs suggested U.S. economic growth was slowing.
The Dow Jones Industrial Average fell 555 points, or 1.4 percent, to 40,287, while the Nasdaq lost 1.7 percent.
The S&P 500 fell 1.1% as weak U.S. manufacturing data erased a 0.8% morning gain.
Movement in bond markets was even more volatile, with 10-year Treasury yields falling below 4%, back to February levels.
In addition to the weak manufacturing data, other reports released during the morning included the number of U.S. jobless claims hitting their highest level in a year and Worker Productivity It improved during the spring.
Taken together, these data points will likely ease upward pressure on inflation, giving the Federal Reserve more room to cut interest rates in the near term.
Yields fell a day earlier after Fed Chairman Jerome Powell signalled most clearly yet that inflation may have slowed enough for the central bank to start cutting interest rates as soon as September, which would boost the economy and investment prices.
But the data also raised concerns that the U.S. economy could collapse under the weight of accumulated interest rates that the Fed has kept at 20-year highs for nearly a year.
These high interest rates have made it more expensive to borrow on credit cards to buy things like a home or a car.
And it could take several months to a year for the effects of interest rate cuts to fully permeate the economy.
