On Thursday, fears of a probable recession sent Wall Street into a massive sell-off. There were concerns that the job market was cooling, the manufacturing sector slackening, and disinclination by the Federal Reserve to delay rate cuts. The Dow Jones fell nearly 500 points; major technology stocks plunged significantly.

On Thursday, investors in the United States offloaded stocks on Wall Street en masse over fears of a possible recession. They seem to be worrying about the cooling job market, slowdowns in manufacturing, and the inability of the Federal Reserve to cut interest rates in time before a recession.

The Dow Jones Industrial Average fell almost 500 points, which is 1.2%. The S&P 500 slid 1.3%. Big tech stocks were lower.

A day earlier, there was a rally on Wall Street after better-than-expected second-quarter earnings from Meta. Then, on Thursday, the Nasdaq-heavy tech index plunged 2.3%. Things only got worse after the markets closed: Intel announced it would cut 15,000 workers, and Amazon reported disappointing results.

Two pieces of economic data released Thursday spooked investors even further. The Institute for Supply Management said that activity in manufacturing hit an eight-month low last month. And the number of people filing new claims for jobless benefits rose to an 11-month high last week.

The ISM report really got things started today, and then the selling just kept going,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. “We are still in earnings season, so there can be upside and downside surprises that could move the market,” he said.

The stock market has been very strong this year, disregarding Thursday’s sell-off. For the year-to-date, the S&P 500 and Nasdaq are up 14.3% and 16%, respectively. A day earlier, the S&P 500 and Nasdaq surged to their biggest daily percentage gains since February, after the Federal Reserve decided not to raise interest rates.

The Federal Reserve said Wednesday it would keep interest rates high through September, a move investors were expecting but now eye the first rate cut next month. Federal Reserve Chair Jerome Powell explained that the central bank is ready to cut rates soon but any reduction will hinge on stable inflation through the summer months. Inflation sat at 3% in June, the lowest since prices began rising in 2021.

“If inflation stays high, we will have to consider that along with other factors,” Powell said on Wednesday. Adding that the Federal Reserve is focused on the labor market also, with the unemployment rate at 4.1% in June, its highest since 2021.

The Federal Reserve’s next meeting is on September 20. Until then, investors will be waiting to hear further comments about interest rates and the overall prospects of the economy.

The recent sell-off shows just how sensitive the market is to news in general and to investor sentiment. Yes, it’s true that the stock market has posted gains this year, but fear of a recession can shift the mood almost immediately, with steep declines. Investors have been very focused on economics and the earnings of companies in order to reassess how the economy is doing and what it all bodes for future growth.

As the earnings season continues to unfold, more ups and downs in the stock market are likely. Positive surprises could give investors renewed confidence and fuel rallies. Bad news will likely lead to another sell-off. All this makes for a challenging time to be an investor, navigating a mix of economic data, company performance, and decisions from the Federal Reserve.

These recent events have really borne out the importance of keeping oneself abreast of market information and sensitive to changes. Whether through careful analysis of economic reports or watching company earnings, investors need vigilance and super adaptiveness in a changing market environment.