The Dow dropped 494 points on Thursday, while the Nasdaq and S&P 500 also pivoted lower, brushing off yesterday's best day since February. Investors were concerned that interest rate cuts may come too late to skirt a potential recession, with a worse-than-expected ISM manufacturing index signaling economic contraction.

Those fears sent the 10-year Treasury yield surging to its highest level since February. Meanwhile, the CBOE Volatility Index (VIX) -- Wall Street's "fear gauge" -- touched its highest intraday level since April, as Wall Street eyed reports from tech giants Apple (AAPL) and Amazon.com (AMZN) after the bell.

Gold Keeps Nabbing Records as Oil Cools

Oil prices cooled off on Thursday amid concerns over energy demand. This follows a big rally due to escalating tensions in the Middle East and lower supplies. September-dated West Texas crude shed $1.60, or 2.1%, to settle at $76.31 a barrel. 

Gold prices notched a new record, with investors brushing off a rising U.S. dollar as hope for an interest rate cut in September continued. The now most-active contract, December-dated gold futures, added $7.80 or 0.3%, to settle at $2,480.80 per ounce.

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