Wall Street's main stock indexes fell on Friday after a key jobs report did little to dispel uncertainty over the size of an expected interest rate cut when the Federal Reserve meets later this month.
In recent trading, the Dow Jones Industrial Average fell 352 points, or 0.9%, to 40,409. The S&P 500 was down 1.5% and the Nasdaq was down 2.3%.
The Labor Department reported that U.S. payrolls grew at a slower rate than expected in August, but the unemployment rate fell to 4.2%, suggesting the orderly labor market slowdown continues.
Fifty-three percent of traders expect a 25-basis-point cut in September, according to CME Group's FedWatch tool, while 47% expect a 50-basis-point cut, a figure that rose to 51% after the data was released before tapering off.
Rate-sensitive growth stocks were mixed: Apple rose 1%, while Tesla fell 2.9% and Nvidia fell 1.5%.
“The market is really struggling with this one. It's on the brink of whether it can be used to justify a 25 or 50 basis point rate cut,” said Gennady Goldberg, head of U.S. rates strategy at TD Securities.
New York Federal Reserve Bank President John Williams said a more balanced economy paves the way for interest rate cuts, but the specific course of action will depend on how the economy performs.
The labor market has been under scrutiny since the unemployment rate unexpectedly rose about a month ago, raising concerns about a recession, sending the tech-heavy Nasdaq index into a correction after falling more than 10 percent and triggering sell-offs in global markets.
Most S&P 500 sectors were lower, with tech stocks dropping 1.6%.
Wall Street's three major indexes are expected to fall for the week. The benchmark S&P 500 is expected to fall more than 2% for the week, its biggest drop in nearly five months, led by a drop of more than 5% in technology stocks.
September was a historically weak month for U.S. stocks, with the S&P 500 losing roughly 1.2% on average per month since 1928.
Chipmaker Broadcom Inc slumped 9.3 percent after it forecast slightly weaker-than-expected fourth-quarter sales due to weaker spending in its broadband division.
Other semiconductor stocks such as Marvell Technology Inc. fell 3%, Advanced Micro Devices Inc. dropped 1.5% and the Philadelphia SE Semiconductor Index fell nearly 2%.
The semiconductor index is on track to post its first weekly decline in more than a month.
Shares of AI server maker Supermicro Computer fell 4.5% after brokerage JPMorgan downgraded the stock to “neutral” from “overweight.”
