Stock market today: Wall Street joins worldwide slump for stocks

NEW YORK -- Stocks are slipping on Wall Street Wednesday as worries rise about the strength of the global economy and a frenzy around artificial intelligence cools.

The S&P 500 was 0.7% lower in morning trading. The Dow Jones Industrial Average was down 228 points, or 0.7%, at 32,814, as of 10:15 a.m. Eastern time, while the Nasdaq composite was 0.5% lower.

Stock markets in Asia fell even more following discouraging data on manufacturing from China. The world’s second-largest economy has not been rebounding as strongly as many investors had hoped. That raises worries when economies around the world are contending with still-high iNFLation and much higher interest rates than a year earlier.

Wall Street has been able to weather such concerns pretty well recently, largely because of big gains for large tech companies and others getting swept up in the buzz around AI. The S&P 500 is still on track to squeeze out a modest gain for May, which would be its third straight winning month.

But some of the air seeped out of those big winners on Wednesday. Nvidia, whose chips are helping to power the surge into AI, dropped 2.1% and is heading for its first fall since it gave a monster forecast last week for upcoming sales. It’s already more than doubled this year and was flirting with a total value of $1 trillion a day earlier.

Advance Auto Parts plunged 32.2% after it reported much weaker profit for the latest quarter than analysts expected. The retailer also said it expects pressures to continue through 2023, and it cut its full-year financial forecast and reduced its dividend.

Hewlett Packard Enterprise tumbled 7.2% after it reported weaker revenue for the latest quarter than expected. HP dropped 3.3% after its revenue likewise fell short of forecasts.

Profits for companies across the S&P 500 were largely better than analysts feared for the first three months of the year. But they were still down from where they were a year earlier.

They’re grappling with an economy that’s already begun to slow under the weight of interest rates that the Federal Reserve has jacked higher in hopes of getting inflation under control.

Many traders are bracing for the Fed to raise rates again at its next meeting in two weeks, but the hope is that may be the last following a furious stretch where it hiked rates at every meeting for more than a year. Higher rates can undercut inflation, but by slowing the economy and hurting prices for investments.

Several reports on the job market this week could sway the Fed’s decision. One released Wednesday morning showed that employers advertised more job openings last month than expected. It's the latest signal of a job market that's remained remarkably resilient in the face of higher interest rates.

While that’s good news for workers and for the economy, it also gives the Fed more leeway to keep rates high.

Other areas of the economy have shown much more pain due in part to higher rates. A report on Wednesday morning suggested manufacturing in the Chicago region is contracting by much more than economists feared. It's the latest region to report much weaker manufacturing than expected, raising worries for the broader economy.

On Friday looms the U.S. government's comprehensive report on hiring across the economy. Economists expect it to show a slowdown in hiring and a tick higher in the unemployment rate.

Bubbling behind all these worries is a still simmering drama in Washington about a potential default on the U.S. government’s debt.

President Joe Biden and House Speaker Kevin McCarthy are trying to wrangle enough votes to pass a deal they struck over the weekend to allow the U.S. government to borrow more money. They need an approval in place before the U.S. government runs out of cash to pay its bills, which could happen as soon as Monday. If they fail, a default could cause tremendous pain for the economy and financial markets.

In stock markets abroad, the Hang Seng tumbled 1.9% in Hong Kong, while stocks fell 0.6% in Shanghai.

Japan's Nikkei 225 dropped 1.4%, while indexes fell 1.2% in France and 1% in Germany.

In the bond market, the yield on the 10-year Treasury fell to 3.67% from 3.70% late Tuesday. It helps set rates for mortgages and other important loans that influence the housing and other markets.

The two-year yield, which moves more on expectations for Fed action, fell to 4.43% from 4.46%.

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AP Business Writers Joe McDonald and Matt Ott contributed.