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Stocks fell on Thursday and bond yields fell as anxiety over the bumpy economic recovery rattled financial markets.

The S&P 500 slid 1.6% before recovering ground. At the end of the trading session, the index was down about 0.9%, a more modest decline but one that stood out against the relatively calm tone of financial markets in recent weeks.

Prior to Thursday, stocks had fallen only twice in the previous 13 trading days, with the S&P 500 in record territory for much of that time. Thursday’s drop was Wall Street’s worst performance since mid-June.

But bond market investors have been signaling concerns about the economy for days. Yields on 10-year Treasury bills, a benchmark for borrowing costs across the economy and a measure of growth prospects, have fallen sharply since late June.

Yields fall when traders buy bonds, which they do when they worry about the economy or other factors that could threaten riskier investments. On Thursday, the yield on the 10-year note fell further, falling to 1.25% before recovering somewhat to 1.30%.

“There are growing concerns about the strength of the economic recovery,” said Edward Moya, senior market analyst at Oanda, a currency exchange. “The spread of the virus in other countries is starting to suggest we won’t have a strong second half.”

Not so long ago, investors were instead worried about the prospect of the economy overheating as nations emerged from lockdowns. Major measures of inflation have become important data points for financial markets, as persistent price increases could prompt the Federal Reserve to start backing away from policies that support the economy.

Although the Fed has said it is far from that point, minutes from its mid-June meeting released on Wednesday showed central bank officials are increasingly divided on the way forward.

On Thursday, the Labor Department said the state’s new jobless claims rose slightly last week to 370,000, versus 350,000 expected by economists.

“It illustrates the argument that we are nowhere near substantial new progress for the economy to justify the Fed’s removal of accommodation measures,” Moya said.

The Rise of Highly Contagious People delta variant of the coronavirus served as a reminder that the pandemic remains a threat to public health and the economy, even as infections and deaths in the United States are near their lowest levels since testing became widely available.

Last month, World Health Organization officials have urged even fully vaccinated people to continue wearing masks and take other precautions, and officials from Los Angeles County reinstated a mask policy, recommending that everyone wear masks indoors in public places.

On Wednesday, the Centers for Disease Control and Prevention estimated that the Delta variant now accounted for more than half of new infections in the United States, and on Thursday Olympic organizers said they spectator bar for most events after a new state of emergency was declared in Tokyo, a stark reminder of how quickly the pandemic can derail plans.

Shares of economy-focused companies were all lower. JPMorgan Chase fell 1.7% along with the shares of many other banks, while mining company Freeport-McMoRan fell 4.2% and rail operator CSX fell 6.2%.

Concerns about the pandemic were also evident in the volatile trades of travel and tourism companies, which were volatile on Thursday. Carnival Corp. fell 1.5%, while Norwegian Cruise Line fell 1%.

Investors have also grown weary of China’s latest crackdown on tech companies. Policymakers in Beijing said this week they would seek to strengthen surveillance of Chinese companiessuch as ride-hailing app Didi, which has listed its shares on stock exchanges overseas.

“It raises a broader concern about what China could do with its global equity platform and it poses a risk if they were to force even more Chinese companies out of the global market,” said John Canavan, principal analyst at Oxford Economics. , noted. “That could further exacerbate some of the equity issues.”

On Thursday, Chinese tech stocks fell sharply. Ride-sharing app Didi fell 5.8%, while trucking app Full Truck Alliance fell 10.9%.