US investors triggered a major sell-off on Wall Street on Thursday, as concerns over a cooling job market, slowing manufacturing, and fears of a looming recession intensified. The Dow Jones Industrial Average fell nearly 500 points (1.2%), while the S&P 500 also experienced a significant decline of 1.3%.

Tech companies faced a rough day as disappointing results led to sell-offs in the sector. Following a brief rally on Wednesday, driven by better than expected second-quarter earnings results from Meta, the tech-heavy Nasdaq index dropped by 2.3%. The downward spiral continued after markets closed when Intel announced a substantial 15,000 layoffs and Amazon released disappointing financial figures.

Furthermore, two economic data points released on Thursday added to the investors' anxieties. The Institute for Supply Management (ISM) reported an eight-month low in manufacturing activity for July. Additionally, the number of Americans filing new applications for unemployment benefits reached an 11-month high. These troubling figures prompted some investors to engage in profit-taking, exacerbating the bearish sentiment.

Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York, emphasized the impact of the weak ISM report, stating, "The ISM is really what started the ball rolling today, and then selling causes more selling." However, he noted that positive surprises during the ongoing earnings season could drive the market higher.

Despite Thursday's stock sell-off, this year has still been relatively strong for the stock market, with the S&P 500 and the Nasdaq registering gains of 14.3% and 16% respectively. The previous session saw both indices experiencing their largest daily percentage gains since February, buoyed by a rally in chip shares after the Federal Reserve announced the decision to maintain interest rates at current levels.

Wednesday's announcement by the Federal Reserve, signaling a delay in any rate cuts until September, was met with little surprise from investors. However, Jerome Powell, the Fed chair, confirmed that rate cuts would be considered in the near future, dependent on stable inflation levels over the summer. In June, inflation was recorded at 3%, one of the lowest figures since the price surge in 2021.

Powell emphasized the Fed's dual mandate, highlighting their focus on both inflation and the labor market. While the unemployment rate for June stood at 4.1%, the highest since 2021, Powell emphasized the need to assess inflation rates alongside other economic indicators before making any decisions. The next meeting of the Federal Reserve is scheduled for September 20.

The volatile and uncertain economic climate has investors on edge, closely monitoring economic data and the actions of central banks. As the year progresses, market participants are eagerly awaiting further developments that will shape the direction of the US stock market and the global economy as a whole.