NEW YORK — U.S. stocks fell on Friday on worries about the U.S. economic outlook after data showed job growth weakened sharply in August.

Bank shares fell, with the S&P 500 bank index last down 2.3%.

The U.S. economy created 22,000 jobs last month instead of an estimated 75,000, confirming softening labor market conditions, according to the Labor Department report.

The three major U.S. stock indexes initially rose and broke records early in the session, as traders of futures tied to the Federal Reserve’s policy rate boosted bets that the U.S. central bank will trim rates in quick succession, starting this month, with a 50-basis-point easing now on the table. However, the gains soon petered out.

“The payroll report today confirms a softening labor market and justifies a rate cut at the Fed meeting later this month,” said Bill Merz, head of capital markets research and portfolio construction at U.S. Bank Asset Management in Minneapolis.

“The labor market is going to remain a very important indicator for how this economic picture plays out, but so far consumer spending has really surprised many people despite softening in the labor market.”

The rate-cut expectations helped to lift the real estate sector and the Philadelphia Housing Index.

The Dow Jones Industrial Average fell 239.72 points, or 0.53%, to 45,381.03, the S&P 500 lost 31.30 points, or 0.49%, to 6,470.30 and the Nasdaq Composite dropped 53.41 points, or 0.25%, to 21,652.83.

BofA Global Research also adjusted its outlook following the report, forecasting one quarter-point cut each in September and December.

Traders now see an 11.6% chance of a 50-bps rate cut this month – a stark change from no such bets a month ago, CME’s FedWatch Tool showed.

Shares of Kenvue fell about 15% after the Wall Street Journal reported, citing people familiar with the matter without including evidence, that U.S. Health Secretary Robert F. Kennedy Jr. plans to announce that use of Kenvue’s pain medication Tylenol in pregnant women is potentially linked to autism.

Broadcom rose to a record high after the chip designer forecast fourth-quarter revenue above estimates and said it expected artificial intelligence revenue growth to improve significantly in fiscal 2026.

Advancing issues outnumbered decliners by a 1.47-to-1 ratio on the NYSE. There were 458 new highs and 63 new lows on the NYSE.

On the Nasdaq, 2,385 stocks rose and 2,095 fell as advancing issues outnumbered decliners by a 1.14-to-1 ratio.

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(Additional reporting by Purvi Agarwal, Ragini Mathur and Medha Singh in Bengaluru; additional reporting by Johann M Cherian; Editing by Pooja Desai and Richard Chang)