Wall Street Grapples with Economic Uncertainty Amid Rate Concerns

Economic concerns are intensifying on Wall Street as elevated interest rates seem to hinder U.S. growth. Investors worry that the Federal Reserve's prolonged restrictive rates could harm economic stability, despite earlier optimism over cooling inflation. Upcoming data releases and earnings reports will be crucial in gauging the market's trajectory.

Economic concerns are intensifying on Wall Street, as months of elevated interest rates appear to be slowing U.S. growth.

Investors who were previously reassured by cooling inflation and gradual employment slowdown are now anxious. A possible September rate cut by the Federal Reserve has heightened fears that prolonged restrictive rates might harm economic stability.

Thursday's data showing labor market and manufacturing weaknesses led to a sharp selloff in U.S. equities. Investors fled from tech and industrial stocks, causing the Nasdaq Composite to plummet nearly 8% from its July high. Market sentiment shifted, focusing on upcoming employment and inflation data, and earnings reports from key companies like Caterpillar and Walt Disney.

(With inputs from agencies.)