Stocks gave up big early gains to end sharply lower nearly across the board Thursday after US employment figures cast doubt on rate cut hopes and as valuation concerns resumed. The Dow Jones industrial average slipped 0.8 percent, the S&P 500 lost 1.6 percent and the Nasdaq dropped 2.2 percent. US Treasury yields and oil prices declined while the dollar rose.

Stronger than expected quarterly results from Nvidia after the close on Wednesday lifted stocks initially Thursday with the Nasdaq up more than 2 percent in early going. But investors apparently remain unconvinced about the AI trade that has propelled stocks higher, and these shares reversed lower. The risk-off move was also fueled by a better than expected rise in nonfarm payrolls reported for September. Market participants evidently viewed prospects of a December rate cut as dimmer after the report even though it also showed rising unemployment, and they were not reassured that the report suggested the economy appears to be avoiding a disastrous downturn.

Worst hit were tech stocks and crypto-linked shares as risk aversion hit bitcoin and other cryto-currencies. On the positive side, Walmart reported strong results and better guidance. That could mean consumer spending is holding up well or it could signal consumers are choosing to shop for bargains as their finances deteriorate.

Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.

Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.