U.S. stocks fell Thursday, despite the increased likelihood of a September rate cut as well as a healthy outlook from tech giant Meta Platforms, as data raised concerns about slowing economic activity.

At 11:18 ET (13:35 GMT), the Dow Jones Industrial Average fell 462 points, or 1.13%, the S&P 500 declined 35 points, or 0.6%, and the NASDAQ Composite dropped 156 points, or 0.9%.

The decline comes as initial jobless claims increased to 249,000 for the week ended in July 27, higher than expected, while the ISM manufacturing index for July came in at 46.8, below the 48.2 forecast. The data adds to concerns regarding slowing economic activity.

Fed says rate cuts are close, flags inflation progress

The Fed kept interest rates unchanged at the conclusion of a two-day meeting on Wednesday, as widely expected.

But Chair Jerome Powell acknowledged progress in bringing down inflation and cooling the labor market - both factors which set the stage for a potential rate cut in September. Powell explicitly mentioned the possibility of a cut in September, although he noted that it was still contingent on positive data.

The Fed will have some inflation and labor market readings to consider before its September meeting. Markets are almost entirely pricing in a 25 basis point cut in September, according to CME Fedwatch.

Focus is now on upcoming nonfarm payrolls data, due on Friday, for more cues on the labor market, especially after data released earlier Thursday showed that the number of Americans filing new applications for unemployment benefits increased to an 11-month high last week.

Initial claims for state unemployment benefits increased 14,000 to a seasonally adjusted 249,000 for the week ended July 27, the highest level since August last year.

Tech rallies with Meta up front; Apple awaited

Technology stocks are in demand following positive earnings from Meta Platforms (NASDAQ:META), with the Facebook-owner reporting stronger-than-expected second-quarter earnings and also presenting a robust outlook. Its stock rose over 9%.

The positive earnings helped investors largely look past middling results from Microsoft Corporation (NASDAQ:MSFT), which missed estimates. Chip designer Arm Holdings (NASDAQ:ARM) also revealed weak earnings, sending its stock down 10%.

Tech earnings are set to continue with majors Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) set to report on Thursday.

Elsewhere, Moderna (NASDAQ:MRNA) stock fell 17% after the slumped 11% after the drugmaker cut its full-year revenue guidance, citing low EU sales and a competitive vaccine environment in the U.S..

Eli Lilly (NYSE:LLY) was up 3.7% after trial results showed weight loss drug Zepbound reduces the risk of hospitalization, death and other outcomes for obese adults with a common type of heart failure.

Qualcomm (NASDAQ:QCOM) stock lost around 5% on flagging a revenue hit after the U.S. revoked one of its export licenses for sanctioned Chinese telecom firm Huawei.

Of the 283 S&P 500 companies that have reported second-quarter earnings till date, 78.4% beat expectations, LSEG data showed.