NEW YORK (AP) — Wall Street slipped as stocks slumped worldwide Wednesday on worries about the strength of the global economy and inflation.

The S&P 500 fell 25.69, or 0.6%, to 4,179.83. The Dow Jones Industrial Average dropped 134.51, or 0.4%, to 32,908.27, and the Nasdaq composite lost 82.14, or 0.6%, to 12,935.29.

Stock markets in Asia fell even more following discouraging data on manufacturing from China. The world’s second-largest economy has not been rebounding as strongly as many investors had hoped. That raises worries when economies around the world are contending with still-high inflation and much higher interest rates than a year earlier.

Wall Street has been able to weather such concerns pretty well recently, largely because of gains for a handful of tech companies and others getting swept up in the buzz around AI. The S&P 500 managed to close out May with a modest gain.

But some of the air seeped out of those big winners on Wednesday. Nvidia, whose chips are helping to power the surge into AI, dropped 5.7% for its first fall since it gave a monster forecast last week for upcoming sales.

Worries are also rising for the larger U.S. economy, which has slowed under the weight of much higher interest rates. The Federal Reserve has raised rates at a furious pace since early last year in hopes of getting inflation under control. But high rates work by hurting the economy and hitting prices for investments.

“We see this as a race for weakness between inflation and economic activity,” said Tony Roth, chief investment officer at Wilmington Trust.

Either inflation needs to break lower to return to the Fed’s target, which would allow it to go easier on interest rates, or the economy will fall into recession. Roth said both the economy and inflation have remained strong for longer than he expected: “It’s a very slow race to the bottom.”

A report released Wednesday morning bolstered expectations for the Federal Reserve to hike rates at least one more time. It showed employers advertised more job openings than expected, the latest signal of a job market that’s remained remarkably resilient.

While that’s good news for workers and for the economy, it also gives the Fed more leeway to keep rates high. A strong job market could keep upward pressure on workers’ wages, which Wall Street fears could keep inflation high.

“The increase in job openings is the worst news the Fed could have because that just puts more pressure on wages,” Roth said.

But stocks pared their losses in the afternoon after a Fed official hinted the central bank may hold rates steady at its next meeting in two weeks.

“Indeed, skipping a rate hike at a coming meeting would allow the Committee to see more data before making decisions about the extent of additional policy firming,” Fed Gov. Philip Jefferson said in a speech. But he said the Fed could still raise rates again at a later meeting.

Other, smaller portions of the economy have shown much more pain in the face of higher rates. A report on Wednesday morning suggested manufacturing in the Chicago region is contracting by much more than economists feared. .

The U.S. banking system has also come under pressure. The Fed-driven surge in rates means customers are pulling their deposits in hopes of making more in interest at money-market funds. Higher rates have also knocked down the values for bonds and other investments banks made when rates were low.

Bubbling behind all these worries is a still simmering drama in Washington about a potential default on the U.S. government’s debt.

President Joe Biden and House Speaker Kevin McCarthy are trying to wrangle enough votes to pass a deal to allow the U.S. government to borrow more money. Without it, the U.S. government could run out of cash to pay its bills as soon as Monday.

On Wall Street, Advance Auto Parts plunged 35 after it reported much weaker profit for the latest quarter than analysts expected. The retailer also said it expects pressures to continue through 2023, and it cut its full-year financial forecast and reduced its dividend.

Hewlett Packard Enterprise tumbled 7.1% after it reported weaker revenue for the latest quarter than expected.

Ford Motor fell 4.7% after CEO Jim Farley told the Bernstein Decisions Conference that electric cars will cost more to make than gas-powered vehicles until at least 2030.

In stock markets abroad, indexes tumbled 1.9% in Hong Kong, 1.5% in France and 1.5% in Germany.

In the bond market, the yield on the 10-year Treasury fell to 3.62% from 3.70% late Tuesday. It helps set rates for mortgages and other important loans that influence the housing and other markets.

The two-year yield, which moves more on expectations for Fed action, fell to 4.39% from 4.46%.

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AP Business Writers Joe McDonald, Matt Ott and Tom Krisher contributed.

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Russia’s defence ministry claimed on Wednesday that its forces had destroyed what it described as Ukraine’s “last warship” two days ago in the port of Odesa in a missile strike.

Ukraine’s navy declined to comment.

“The last warship of the Ukrainian navy, the Yuriy Olefirenko, was destroyed at a warship mooring in the port of Odesa,” defence ministry Spokesman Igor Konashenkov said in a daily briefing on the war.

He said the vessel had been hit with “high-precision weapons” – a phrase he uses to mean missiles – on May 29, but gave no further details.

Oleh Chalyk, a spokesperson for the Ukrainian navy, said he would not respond to any assertions made by Russia. The Ukrainian navy will not disclose any information about losses during the war, he added.

Earlier, Russia claimed that a Ukrainian drone sparked a fire at an oil refinery in southern Russia and shelling hit a Russian town close to the border for the third time in a week, damaging buildings and setting vehicles ablaze.

“A mahapanchayat’ will be held in Soram village on Thursday to discuss the ongoing protest by wrestlers.” said Tikait