• Dow Jones tumbled after a misfire in US PMI activity figures on Thursday.
• Concerns of a steepening economic downturn crimped risk appetite.
• Markets struggling to balance hope for rate cuts with economic realities.

The Dow Jones Industrial Average (DJIA) tumbled 600 points on Thursday after worsening economic activity figures reminded markets of the very real risk that a downturn in the US economy could tip into a hard landing scenario. Near-term gains sparked by rising hopes for interest rate cuts were wiped out as investors struggle to balance their hopes for soft data to spark a new rate cutting cycle from the Federal Reserve (Fed) and the fact that those same soft figures could spark a full-blown recession, rendering rate cuts a moot point.

US Initial Jobless Claims for the week ended July 26 rose to 249K from the previous week’s 235K, lurching past the forecast uptick to 236K. July’s US ISM Manufacturing Purchasing Managers Index (PMI) tumbled to an eight-month low of 46.8 compared to the previous 48.5 and entirely reversing the forecast move up to 48.8.