“It’s a question of when they cut, not if,” said Niladri “Neel” Mukherjee, chief investment officer of TIAA Wealth Management.

Companies whose profits are most closely tied to the strength of the economy lagged the market Thursday following the reports, such as oil-and-gas producers and industrial companies.

Some companies have been able to skyrocket regardless of the pressures on the economy because of an ongoing frenzy around artificial-intelligence technology.

Tesla rose 2.9 per cent in the lead-up to a shareholder vote on Elon Musk’s $US56 billion ($84 billion) pay package. The vote came in after the closing bell, with shareholders approving the package.

In the bond market, the yield on the 10-year Treasury fell to 4.24 per cent from 4.32 per cent late Wednesday and from 4.60 per cent late last month. The two-year yield, which moves more on expectations for the Fed, fell to 4.69 per cent from 4.76 per cent.

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Most Fed officials are penciling in either one or two cuts to interest rates this year, and traders are hopeful they can begin as soon as September. Such cuts would ease the pressure on the economy and give a boost to all kinds of investment prices.

European markets have gotten rocked after recent elections saw a surprising rise in support for the far right in places like France and Germany. Volatility also hit markets recently after investors learned the election results in other countries, such as Mexico and India.

European stocks fell sharply Thursday as leaders of the Group of Seven leading industrialised nations gathered in Italy. France’s CAC 40 fell 2 per cent, and Germany’s DAX lost 2 per cent.

With AP