New York — Some calm is returning to Wall Street, and U.S. stocks are holding steadier after Japan’s market soared earlier Tuesday to bounce back from its worst loss since 1987.

The S&P 500 was 0.2% higher in early trading and on track to break a brutal three-day losing streak. It had tumbled a bit more than 6% after several weaker-than-expected reports raised worries the Federal Reserve had pressed the brakes too hard for too long on the U.S. economy through high interest rates in order to beat inflation.

The Dow Jones Industrial Average was up 47 points, or 0.1%, as of 9:43 a.m. Eastern time, and the Nasdaq composite was 0.3% lower.

Stronger-than-expected profit reports from several big U.S. companies helped support the market. Kenvue, the company behind Tylenol and Band-Aids, jumped 13.5% after reporting stronger profit than expected thanks in part to higher prices for its products. Uber rolled 4.3% higher after easily topping profit forecasts for the latest quarter.

Caterpillar veered from an early loss to a gain of 1.7% after reporting stronger earnings than expected but weaker revenue.

Several technical factors may have accelerated the recent swoon for markets, beyond the weak U.S. hiring data and other reports, in what strategists at Barclays call “a perfect storm” for causing extreme market moves. One is centered in Tokyo, where a favorite trade for hedge funds and other investors began unraveling last week after the Bank of Japan made borrowing more expensive by raising interest rates above virtually zero.

That scrambled trades where investors had borrowed Japanese yen at low cost and invested it elsewhere around the world. The resulting exits from those trades may have helped accelerate the declines for markets around the world.

But Japan’s Nikkei 225 jumped 10.2% Tuesday, following its 12.4% sell-off the day before, which was its worst since the Black Monday crash of 1987. Stocks in Tokyo rebounded as the value of the Japanese yen stabilized a bit against the U.S. dollar following several days of sharp gains.

“The speed, the magnitude and the shock factor clearly demonstrate” how much of the moves were driven by how traders were positioned, rather than just worries about the economy, according to the strategists at Barclays led by Stefano Pascale and Anshul Gupta.

Still, some voices along Wall Street are continuing to urge caution.

Barry Bannister, chief equity strategist at Stifel, is warning more drops could be ahead because of a slowing U.S. economy and sticky inflation. He had been predicting a coming “correction” in U.S. stock prices for a while, including an acknowledgement in July that his initial call was early. That was two days before the S&P 500 set its latest all-time high and then began sinking.

While fears are rising about a slowing U.S. economy, it is still growing, and a recession is far from a certainty. The U.S. stock market is also still up a healthy amount for the year so far. The S&P 500 has romped to dozens of all-time highs this year, in part due to a frenzy around artificial-intelligence technology and critics have been saying prices looked too expensive.

Elsewhere, European markets were mostly left out of the rebound, with stock indexes down modestly in Germany France and the United Kingdom.
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Bangkok — Japan’s benchmark Nikkei 225 index soared more than 10% on Tuesday, rebounding after a rollercoaster start to the week that sent markets tumbling in Europe and on Wall Street.

European markets were mostly lower, with Germany’s DAX down 0.4% at 17,277.27 and the CAC 40 in Paris 0.7% lower, at 7,098.89.

In London, the FTSE 100 shed 0.4% to 7,974.44.

Those modest declines and gains in Asia suggested a respite from the turmoil of the past two trading sessions, when the Nikkei lost a combined 18.2% and other markets also swooned. U.S. futures showed solid gains, with the contract for the S&P 500 up 0.5% and that for the Dow Jones Industrial Average gaining 0.3%.

Monday’s plunge reminiscent of a crash in 1987 that swept around the world pummeled Wall Street with more steep losses, as fears worsened about a slowing U.S. economy.

The Nikkei gained nearly 11% early Tuesday and bounced throughout the day to close up 3,217.04 points at 34,675.46 as investors snapped up bargains after the 12.4% rout of the day before.

“Calm finally appears to be returning,” Bas van Geffen of Rabobank said in a report. The Nikkei’s 10% gain didn’t make up for Monday’s loss, he said, “but at least it takes some of the ‘panic’ out of the selling.”

The dollar rose to 144.87 yen from 144.17 yen. The yen’s rebound against the dollar after the Bank of Japan raised its main interest rate on July 31 was one factor behind the recent market swings, as investors who had borrowed in yen and invested in dollar assets like U.S. stocks sold their holdings to cover the higher costs of those “carry trade” deals.

Elsewhere in Asia, South Korea’s Kospi jumped 3.3% to 2,522.15. It had careened 8.8% lower on Monday.

Hong Kong’s Hang Seng index gave up early gains to close 0.3% lower at 16,647.34. The Shanghai Composite index, largely bypassed by Monday’s drama, rose 0.2% to 2,867.28.

In Australia, the S&P/ASX 200 advanced 0.4% to 7,680.60 as the central bank kept its main interest rate unchanged. Taiwan’s Taiex was up 1.2% after plunging 8.4% the day before and the SET index in Bangkok gained 0.3%.

On Monday, the S&P 500 dropped 3% for its worst day in nearly two years. The Dow declined 2.6% and the Nasdaq composite slid 3.4%.

The global sell-off that began last week and gained momentum after a report Friday showed that American slowed their hiring in July by much more than economists expected. That and other weaker than expected data added to concern the Federal Reserve has pressed the brakes on the U.S. economy by too much for too long through high interest rates in hopes of stifling inflation.

But sentiment was helped by a report Monday by the Institute for Supply Management said growth for U.S. services businesses was a touch stronger than expected, led by the arts, entertainment and recreation sectors, along with accommodations and food services.

The U.S. economy is still growing, so a recession is far from certain. The U.S. stock market is still up a healthy amount for the year, with double-digit percentage gains for the S&P 500, the Dow and the Nasdaq.

Markets have romped to dozens of all-time highs this year, in part due to a frenzy around artificial-intelligence technology and critics have been saying prices looked too expensive.

Other worries also are weighing on the market. The Israel-Hamas war and other global hotspots could cause sharp swings for the price of oil.

Early Tuesday, U.S. benchmark crude oil was up 12 cents at $73.06 per barrel. Brent crude, the international standard, picked up 3 cents to $76.33 per barrel.

The euro fell to $1.0910 from $1.0954.
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Islamabad — Pakistan’s military revealed Monday that millions of liters of Iranian oil are being smuggled into the country each day, but rejected long-standing allegations that it is also playing a role in the illegal trade.

Lt. Gen. Ahmed Sharif Chaudhry, the army spokesperson, told a televised news conference that “consistent efforts” are being made to enhance security along the country’s more than 900-kilometer border with Iran in order to restrict oil smuggling.

“If you look at the numbers, [the fuel smuggling] has come down from 15-16 million liters per day to 5-6 million liters per day, thanks to the combined efforts of the army, Frontier Corps [paramilitary force], law enforcement, and intelligence agencies,” Chaudhry stated.

He did not provide further details, but Chaudhry is the first Pakistani official to publicly share estimates regarding the ongoing large-scale illegal oil trade between the two countries.

A rare comprehensive investigative report on the long-running illicit trade, conducted by two Pakistani official spy agencies and leaked to local media last May, revealed that Iranian traders smuggle more than $1 billion worth of petrol and diesel into Pakistan annually.

The probe found that the illegal fuel supply accounted for about 14% of Pakistan’s yearly consumption, resulting in hundreds of millions of dollars in losses “to the exchequer.”

The report identified more than 200 oil smugglers as well as government and security officials benefiting from the lucrative illegal oil trade. 

It said that up to 2,000 vehicles, each with a capacity of 3,200-3,400 liters, are used daily to transport diesel across the border. Additionally, some 1,300 boats, each with a capacity of “1,600 to 2,000” liters, are also used to smuggle Iranian fuel.

Petroleum dealers attributed the surge in cross-border smuggling to years of U.S.-led Western sanctions on the Iranian oil sector, which compelled Tehran to seek alternative markets for its exports.

Iranian traders reportedly sell fuel in their local currency to buyers in Pakistan’s southwestern border province of Baluchistan and collect dollars from the Pakistani market. The illegal fuel is then transported elsewhere in the South Asian nation.

Islamabad mainly sources its fuel from the Middle East. The government has dramatically raised fuel prices in recent months as part of efforts to secure a new International Monetary Fund loan of about $7 billion. 

Due to depleting foreign exchange reserves, analysts believe cash-strapped Pakistan could be allowing Iranian oil to be smuggled into the country to fulfill domestic needs.

Chaudhry, while speaking Monday, cautioned that sealing the border with Iran to stop the long-standing oil smuggling without providing alternative livelihood opportunities could have disastrous consequences for poverty-stricken and underdeveloped Pakistani border towns.

The intelligence report published in May estimated that up to 2.4 million individuals in insurgency-hit Balochistan relied on the smuggling of Iranian oil for their sustenance, and they would be left without means of survival if the illicit trade were to cease.

Pakistani government officials did not immediately respond to VOA inquiries seeking a response to Monday’s revelations in time for publication.

Afghan border

Meanwhile, the military spokesperson criticized neighboring Afghanistan’s Taliban rulers for not effectively guarding their side of the nearly 2,600-kilometer border between the two countries.

Chaudhry stated that the Pakistani military has established more than 1,450 border posts while the Afghan side has only more than 200. He argued that the Taliban’s limited number of posts could result from apathy or lack of resources to staff the border crossings.

“Interestingly, it’s not just the lesser number of posts or the border guards,” the army spokesperson said. “We have also noticed that whenever illegal movement or smuggling attempts occur, or people are assisted in crossing the border, gunfire is typically initiated from the Afghan side, or other tactics are used to facilitate such activities.”

Pakistan maintains that anti-state militants have moved their sanctuaries to Afghanistan since the Taliban regained control of the country three years ago and intensified cross-border attacks, killing hundreds of Pakistani security forces and civilians.

There was no immediate reaction from Taliban authorities to Pakistani allegations, but they have previously rejected them as baseless, saying terrorist groups do not operate on Afghan soil and that nobody is allowed to threaten neighboring countries. 
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New York — Nearly everything on Wall Street is tumbling Monday as fear about a slowing U.S. economy worsens and sets off another sell-off for financial markets around the world.

The S&P 500 was down by 3.1% in early trading, coming off its worst week in more than three months. The Dow Jones Industrial Average was down 996 points, or 2.5%, as of 9:50 a.m. Eastern time, and the Nasdaq composite slid 3.8%.

The drops were just the latest in a sell-off that swept the Earth. Japan’s Nikkei 225 helped start Monday by plunging 12.4% for its worst day since the Black Monday crash of 1987.

It was the first chance for traders in Tokyo to react to Friday’s report showing U.S. employers slowed their hiring last month by much more than economists expected. That was the latest piece of data on the U.S. economy to come in weaker than expected, and it’s all raised fear the Federal Reserve has pressed the brakes on the U.S. economy by too much for too long through high interest rates in hopes of stifling inflation.

Losses elsewhere in the world were nearly as neck-snapping. South Korea’s Kospi index careened 8.8% lower, stock markets across Europe sank roughly 3% and bitcoin dropped 12%.

Even gold, which has a reputation for offering safety during tumultuous times, slipped 1.6%.

That’s in part because traders are wondering if the damage has been so severe that the Federal Reserve will have to cut interest rates in an emergency meeting, before its next scheduled decision on Sept. 18. The yield on the two-year Treasury, which closely tracks expectations for the Fed, fell to 3.79% from 3.88% late Friday and from 5% in April.

“The Fed could ride in on a white horse to save the day with a big rate cut, but the case for an inter-meeting cut seems flimsy,” said Brian Jacobsen, chief economist at Annex Wealth Management. “Those are usually reserved for emergencies, like COVID, and an unemployment rate of 4.3% doesn’t really seem like an emergency.”

“The Fed could respond by stopping” the shrinking of its holdings of Treasurys and other bonds, which could put less upward pressure on longer-term yields, he said. “That could at least by a symbolic action that they’re not blind to what’s going on.”

Of course, the U.S. economy is still growing, and a recession is far from assured. The Fed has been clear about the tightrope it began walking when 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.

After leaving the federal funds rate steady last week, before several discouraging economic reports hit, Fed Chair Jerome Powell said officials “have a lot of room to respond if we were to see weakness” in the job market after raising their main rate to the highest level in more than two decades.

Goldman Sachs economist David Mericle sees a higher chance of a recession following Friday’s jobs report. But he still sees only a 25% chance of that, up from 15%, in part “because the data look fine overall” and he does not “see major financial imbalances.”

Still, stocks of companies whose profits are most closely tied to the economy’s strength took heavy losses on the fears about a sharp slowdown. The small companies in the Russell 2000 index dropped 5.5%, further dousing what had been a revival for it and other beaten-down areas of the market.

Making things worse for Wall Street, Big Tech stocks also tumbled sharply as the market’s most popular trade for much of this year continued to unravel. Apple, Nvidia and a handful of other Big Tech stocks known as the “ Magnificent Seven ” had propelled the S&P 500 to dozens of all-time highs this year, in part on a frenzy around artificial-intelligence technology. They were so strong that they overshadowed weakness for areas of the stock market weighed down by high interest rates.

But Big Tech’s momentum turned last month on worries investors had taken their prices too high and expectations for future growth are becoming too difficult to meet. A set of underwhelming profit reports from Tesla and Alphabet added to the pessimism and accelerated the declines.

Apple fell 4.6% Monday after Warren Buffett’s Berkshire Hathaway disclosed that it had slashed its ownership stake in the iPhone maker.

Nvidia, the chip company that’s become the poster child of Wall Street’s AI bonanza, fell even more, 8.3%. Analysts cut their profit forecasts over the weekend for the company after a report from The Information said Nvidia’s new AI chip is delayed. It has trimmed its gain for the year to 98.7% from 170% in the middle of June.

Because the Magnificent Seven companies have grown to be the market’s biggest by market value, the movements for their stocks carry much more weight on the S&P 500 and other indexes.

Worries outside corporate profits, interest rates and the economy are also weighing on the market. The Israel-Hamas war may be worsening, which beyond its human toll could also cause sharp swings for the price of oil. That’s adding to broader worries about potential hotspots around the world, while upcoming U.S. elections could further scramble things.
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AMSTERDAM — Semiconductor industry group SEMI Europe called on the European Union on Monday to place as few restrictions as possible on outbound investment in foreign computer chip technology by companies based in the bloc. 

Proposals to screen outbound investment — European capital being invested in foreign semiconductor, AI and biotechnology companies — are being considered, though no EU decision is expected before 2025. 

The U.S. has issued draft rules for banning some such investments in China that could threaten U.S. national security, part of a broader push to prevent U.S. know-how from helping the Chinese to develop sophisticated technology and dominate global markets. 

“European semiconductor companies must be as free as possible in their investment decisions or otherwise risk losing their agility and relevance,” SEMI Europe said in a paper outlining its recommendations. 

It said policies under consideration by the EU appear to be overly broad and if adopted could force companies to disclose sensitive business information, adding that restrictions on cross-border research cooperation would be misplaced. 

“We encourage the European Commission to further address these aspects and to not infringe on the ability of European multinational companies to carry out the necessary investments to sustain their operations,” it said. 

SEMI Europe represents about 300 Europe-based semiconductor firms and institutions, including companies such as ASMLASML.AS, ASMASMI.AS, InfineonIFXGn.DE, STMicroelectronicsSTMPA.PA, NXPNXPI.O, and research centers such as imec, CEA-Leti and Fraunhofer. 

Alongside the proposals for outbound investment screening, the EU has also been moving towards a law that screens inbound investments of foreign capital that might pose a security risk, such as purchases of European ports, nuclear plants and sensitive technologies. 

 
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New York — Economic fears are roiling Wall Street, as worries grow that the Federal Reserve may have left interest rates elevated for too long, allowing them to hurt U.S. growth.

Alarming economic data in recent days have deepened those concerns. U.S. job growth slowed more than expected in July, a Friday report showed, while the unemployment rate increased to 4.3%, heightening fears that a deteriorating labor market could make the economy vulnerable to a recession.

The jobs report exacerbated a selloff in stocks that began on Thursday, when data showing weakness in the labor market and manufacturing sector pushed investors to dump everything from chip stocks to industrials while piling into defensive plays.

Richly valued tech stocks tumbled further on Friday, extending losses in the Nasdaq Composite .IXIC to more than 10% from a record closing high reached in July. The benchmark S&P 500 index .SPX has slid 5.7% from its July peak.

“This is what a growth scare looks like,” said Wasif Latif, president and chief investment officer at Sarmaya Partners. “The market is now realizing that the economy is indeed slowing.”

For months, investors had been heartened by cooling inflation and gradually slowing employment, believing they bolstered the case for the Fed to begin cutting interest rates. That optimism drove big gains in stocks: the S&P 500 remains up 12% this year, despite recent losses; the Nasdaq has gained nearly 12%.

Now that a September rate cut has come into view following a Fed meeting this week, investors are fretting that elevated borrowing costs may already be hurting economic growth. Corporate earnings results, which saw disappointments from companies such as Amazon, Alphabet and Intel, are adding to their concerns.

“We’re witnessing the fallout from the curse of high expectations,” said James St. Aubin, chief investment officer at Ocean Park Asset Management. “So much had been invested around the scenario of a soft landing, that anything that even suggests something different is difficult.”

Next week brings earnings from industrial bellwether Caterpillar CAT.N and media and entertainment giant Walt Disney DIS.N, which will give more insight into the health of the consumer and manufacturing, as well as reports from healthcare heavyweights such as weight-loss drugmaker Eli Lilly LLY.N.

Bets in the futures markets on Friday suggested growing unease about the economy. Fed fund futures reflected traders pricing an over-70% chance of a 50-basis point cut at the central bank’s September meeting, compared to 22% the day before, according to CME FedWatch. Futures priced a total of 116 basis points in rate cuts in 2024, compared to just over 60 basis points priced in on Wednesday.

Broader markets also showed signs of unease. The Cboe Volatility index .VIX – known as Wall Street’s fear gauge – hit its highest since March 2023 on Friday as demand for options protection against a stock market selloff rose.

Meanwhile, investors have rushed into safe haven bonds and other defensive areas of the market. U.S. 10-year yields – which move inversely to bond prices – on Friday dropped as low as 3.79%, the lowest since December.

Sectors that are often popular during times of economic uncertainty are also drawing investors.

Options data for the Health Care Select Sector SPDR Fund XLV.P showed the average daily balance between put and call contracts over the last month at its most bullish in about three years, according to a Reuters analysis of Trade Alert data. Trading in the options on Utilities Select Sector SPDR Fund XLU.P also shows a pullback in defensive positioning, highlighting traders’ expectations for strength for the sector.

The healthcare sector .SPXHC is up 4% in the past month, while utilities .SPLRCU are up over 9%. By contrast, the Philadelphia SE Semiconductor index .SOX is down nearly 17% in that period amid sharp losses in investor favorites such as Nvidia NVDA.O and Broadcom AVGO.O.

To be sure, some investors said the data could just be a reason to lock in profits after the market’s overall strong run in 2024.

“This is a good excuse for investors to sell after a huge year to date rally,” said Michael Purves, CEO of Tallbacken Capital Advisors. “Investors should be prepared for some major volatility, particularly in the big tech stocks. But it will probably be short-lived.” 
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New York — U.S. stocks are tumbling Friday on worries about whether the U.S. economy can hold up amid the countdown for a cut to interest rates by the Federal Reserve, as a sell-off for stocks whips all the way around the world back to Wall Street.

The S&P 500 was sinking by 2.5% in late morning trading, potentially on pace for its worst day since 2022, and on track for its first back-to-back loss of more than 1% since April. The Dow Jones Industrial Average was down 806 points, or 2%, as of 10:45 a.m. Eastern time, and the Nasdaq composite was 3.1% lower.

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 Fed 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 kept its main interest rate at a two-decade high for too long in its zeal to stifle inflation. A rate cut would make it easier for U.S. households and companies to borrow money and support 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 roughly two-in-three 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 on Wednesday that such a deep reduction is “not something we’re thinking about right now.”

U.S. stocks had already appeared to be headed for losses 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 11.9% after reporting weaker revenue for the latest quarter than expected. The retail giant also gave a forecast for operating profit for the summer that fell short of analysts’ expectations.

Intel dropped even more, 27.9%, 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 2.4%, 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 their profit gains are growing 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 at the same time 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 4.2%, 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 3.82% from 3.98% late Thursday and from 4.70% in April.

Amid all the fear, some voices on Wall Street were still advising caution.

“While worries of a policy mistake are rising, one negative miss shouldn’t lead to overreaction,” according to Lara Castleton, U.S. head of portfolio construction and strategy at Janus Henderson Investors.

She points out the U.S. economy is still growing, and inflation is still coming down. The S&P 500, meanwhile, isn’t far off its record set two weeks ago. “Equities selling off should be seen as a normal reaction, especially considering the high valuations in many pockets of the market. It’s a good reminder for investors to focus on the earnings of companies going forward.”

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 extended losses this 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, and stock indexes fell across much of Europe.

Commodity prices have also had a rough ridet 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 3.4% Friday to $73.73 and brought its loss for the week to 4.5%.

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BANGKOK — 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.

Bracing for a highly anticipated employment report coming on Friday, the future for the S&P 500 was down 1.3%, while that for the Dow Jones Industrial Average sank 0.9%.

The declines followed a retreat on Wall Street after weak manufacturing data raised worries the Federal Reserve may have waited too long to cut interest rates, raising risks of a recession. After the U.S. central bank held steady at a meeting this week, Fed Chair Jerome Powell said a cut could come in September.

“The short-lived satisfaction of Fed Chief Powell communicating decent odds of a September rate cut has turned sour as investors are now panicking that the central bank isn’t trimming soon enough,” José Torres, a senior economist at Interactive Brokers, said in a report.

A nearly 19% decline in Intel’s shares in aftermarket trading deepened the gloom. The chipmaker said it was cutting 15% of its massive workforce — about 15,000 jobs — to better compete with more successful rivals like Nvidia and AMD.

In early European trading, Germany’s DAX shed 1.5% to 17,806.65, while the CAC 40 slipped 1% to 7,298.81. In London, the FTSE 100 fell 0.6% to 8,233.49.

Japan’s market retreated to where it was trading in January before it surged to an all-time high last month of over 42,000. The Nikkei 225 lost 2,216.63 points Friday to 35,909.70, with banks’, technology-related and manufacturers’ shares hit by heavy selling.

The Nikkei has lost 6.2% in the past three months.

Japanese shares were pummeled after the central bank raised its benchmark interest rate on Wednesday, to 0.25% from 0.1%. That pushed the value of the Japanese yen higher against the U.S. dollar, potentially hurting overseas earnings of major manufacturers and deflating a boom in tourism.

The dollar fell to 148.77 yen early Friday from 149.37 yen late Thursday. It had recently traded above 160 yen. The euro rose to $1.0820 from $1.0789.

Elsewhere in Asia on Friday, Hang Seng in Hong Kong dropped 2.1% to 16,945.51, while the Shanghai Composite index saw a more modest loss, of 0.9% to 2,905.34.

Chinese shares have extended losses this 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.

The Kospi in Seoul dropped 3.7% to 2,676.19 and Taiwan’s Taiex sank 4.4%. Both markets tend to be hit hard by weakness in technology shares.

South Korea’s Samsung Electronics dropped 4.2% while another maker of computer chips and other components, SK Hynix, dropped 10.4%. Taiwan Semiconductor Manufacturing Co., the world’s largest chip maker, lost 5.9%.

Elsewhere in Asia, Australia’s S&P/ASX gave up 2.1% to 7,943.20 and the Sensex in India was down 1.1%. Bangkok’s SET fell 0.7%.

It has been a nerve wracking week for markets even as central banks in Japan, the United States and England acted much as had been expected. Japan raised its benchmark, the Fed stood pat, and the Bank of England lowered its key rate by 0.25%, to 5%, its first cut in more than four years.

Commodity prices have also had a rough ride, with oil prices surging after the killings of leaders of Hamas and Hezbollah that fueled fears conflict in the Middle East might escalate into a wider war. But prices fell back Thursday and were only marginally higher early Friday.

Benchmark U.S. crude oil gained 12 cents to $76.43 per barrel. Brent crude, the international standard, was up 12 cents at $79.64 per barrel.

The price of gold, a traditional refuge for investors in uncertain times, has surged to over $2,500 an ounce.

Meanwhile, other commodities sank on concerns that weakness in the U.S. and other major economies will hurt demand. The price of nickel dropped 2.4%, aluminum dropped 1% and copper traded in New York dropped 2.3%.

Worry is mounting that the Fed has kept its main interest rate at a two-decade high for too long in its zeal to stifle inflation by making it more costly to borrow. A rate cut could take months to a year to filter through the economy.

On Thursday, the S&P 500 sank 1.4% after a report from the Institute for Supply Management showed U.S. manufacturing activity is still shrinking. The Dow fell 1.2%, and the Nasdaq composite dropped 2.3%. The small stocks in the Russell 2000 index dropped 3%.

Other reports Thursday showed the number of U.S. workers applying for jobless benefits hit its highest level in about a year and that productivity for U.S. workers improved in the spring. The data are likely to relieve pressure on inflation and give the Fed more leeway to cut rates.

Employment growth does appear to be slowing more than expected, Philip Marey, senior U.S. strategist for Rabobank, said in a commentary.

“This suggests that the Fed’s strategy to bring better balance between labor demand and supply through restrictive interest rates is working, but of course the risk is that employment growth is brought to a halt and the economy slides into a recession.”
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BANGKOK — China’s powerful Politburo has endorsed the ruling Communist Party’s long-term strategy for growing the economy by encouraging more consumer spending and weeding out unproductive companies to promote “survival of the fittest.”

A statement issued after the meeting of the 24 highest leaders of the party warned that coming months would be tough, perhaps alluding to mounting global uncertainties ahead of the U.S. presidential election in November.

“There are still many risks and hidden dangers in key areas,” it said, adding that the tasks for reform and stability in the second half of the year were “very heavy.”

The Politburo promised unspecified measures to restore confidence in financial markets and boost government spending, echoing priorities laid out by a wider meeting of senior party members earlier in July. After that gathering, China’s central bank reduced several key interest rates and the government doubled subsidies for electric vehicles bought to replace older cars as part of the effort to spur growth.

The Politburo’s calls to look after low- and middle-income groups reflect pledges to build a stronger social safety net to enable families to spend more instead of socking money away to provide for health care, education and elder care. But it provided no specifics on how it will do that.

“This sounds promising on paper. But the lack of any specifics means it is unclear what it will entail in practice,” Julian Evans-Pritchard of Capital Economics said in a commentary.

The party’s plans for how to improve China’s fiscal policies at a time of burgeoning local government debt were “short on new ideas,” he said.

Instead, the emphasis is on moving faster to implement policies such as the government’s campaign to convince families to trade in old cars and appliances and redecorate their homes that includes tax incentives and subsidies for purchases that align with improved efficiency and reducing use of polluting fossil fuels.

China’s economy grew at a 4.7% annual rate in the last quarter after expanding 5.3% in the first three months of the year. Some economists say the official data overstate the rate of growth, masking long-term weaknesses that require broad reforms to rebalance the economy away from a heavy reliance on construction and export manufacturing.

Under leader Xi Jinping, China has prioritized developing industries using advanced technologies such as electric vehicles and renewable energy, a strategy that has made the country a leader in some areas but also led to oversupplies that are now squeezing some manufacturers, such as makers of solar panels.

The Politburo’s statement vowed support for “gazelle enterprises and unicorn enterprises,” referring to new, fast-growing companies and high-tech start-ups. It warned against “vicious competition” but also said China should improve mechanisms to ensure “survival of the fittest” and eliminate “backward and inefficient production capacity.”

The party has promised to help resolve a crisis in the property sector, in part by encouraging purchases of apartments to provide affordable housing and to adapt monetary policy to help spur spending and investment.

But the document issued Tuesday also highlighted longstanding concerns. The countryside and farmers need more support to “ensure that the rural population does not return to poverty on a large scale,” it said.

It also condemned what analysts have said is widespread resistance to fresh initiatives, saying that “formalism and bureaucracy are stubborn diseases and must be corrected” and warning that economic disputes should not be resolved by “administrative and criminal means.”

Chinese markets have not shown much enthusiasm for the policies outlined in recent weeks.

On Tuesday, the Hong Kong benchmark Hang Seng index sank 1.4%, while the Shanghai Composite index lost 0.4%. The Hang Seng has fallen 4.3% in the past three months while Shanghai’s index is down 7.3%.
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