E1

 Blue-chip gauge fell 470 points at session low

 slid 157.56 points, or 2.1%, to 7,485.14.COMP, -2.06% shed 40.43 points, or 1.4%, to 2,768.78. The Nasdaq Composite Index SPX, -1.44% dropped 327.23 points, or 1.3%, to end at 25,379.45 and the S&P 500 index DJIA, -1.27%The Dow Jones Industrial Average

A big drop in China’s stock market underscored simmering worries about the possibility of emerging-market troubles spreading to other regions as well as the impact of U.S.-China trade tensions on the global economy.

U.S. stocks closed sharply lower Thursday, dogged by worries about global growth and as investors continued to weigh minutes of the Federal Reserve’s September meeting, which were viewed as hawkish.

What drove the market?

Chinese stock markets touched a fresh four-year low and a seemingly hawkish Fed has combined to undercut investor sentiment.

The minutes of the Fed’s September meeting, released on Wednesday, indicated that policy makers are prepared to forge ahead with increases and will likely hike rates again as early as December, as expected. Tightening policy comes as no surprise but it does elevate concerns about increasing borrowing costs and the impact that could have on equity prices, market participants say.

Last week’s downdraft in stocks was attributed partly to a jump in yields of U.S. government bonds, which can also dampen appetite for stocks against so-called risk-free Treasurys. Rate hikes are expected to drive yields higher still.

Concerns about the vitality of Asian markets, in particular China’s, may also be weighing on the investment mood. Shanghai’s composite index SHCOMP, +2.58% fell 2.9% and the Shenzhen A-Share 399106, +2.58% dropped 2.7%. Weakness in Beijing’s markets came after China’s currency, the yuan, briefly touched its weakest level since January of 2017. One buck last fetched 6.9379 yuan USDCNY, -0.0951% up 0.2%. Those currency moves came after Treasury refrained from labeling China a currency manipulator in its biannual report on currency practices released late Wednesday.

The U.S. and China have been locked in a trade spat that doesn’t show signs of easing and that threatens to produce intermittent headwinds for markets.

Which data were in focus?

First-time jobless claims fell by 5,000 from a week ago, as the Labor Department reported just 210,000 Americans applying for initial jobless benefits in the week ending Oct. 13, in line with economist estimates, according to a poll by MarketWatch, and close to 49-year lows.

The Philadelphia Fed manufacturing index came in slightly below last month’s reading, with a print of 22.2 in October, compared with 22.9 in September. Still, the figures were above expectations and indicate healthy activity in the factory sector.

The Conference Board said its leading economic indicators rose 0.5% in September.

What were strategists saying?

That stocks entered October, a notorious month for volatility, overbought and with much of the good news on earnings already baked in are all contributing factors for the market’s weakness, said Bruce Bittles, chief investment strategist at Baird.

See: Stocks are due for a lift as buyback blackouts end, says JPMorgan

”Technically, we have been pointing out that stocks were vulnerable as leadership was very narrow at the top with everyone owning FANG stocks either outright or through ETFs and mutual funds. Corrections are normal [and] so far this looks to be a correction that could carry further, setting up the possibility for a year-end rally later on,” he said. FANG is an acronym for popular tech stocks made up of Facebook Inc. FB, -2.82% Amazon.com Inc. AMZN, +0.40% Netflix Inc. NFLX, -4.93%  and Google parent Alphabet Inc. GOOG, -2.48% GOOGL, -2.63%

Tom Essaye, president of the Sevens Report, pointed to weak export Japanese export data and a poor showing in the Chinese equities market as reason for softness in trading.

Read: Don’t sweat a stock-market selloff with midterms around the corner, says strategist

“Are any of those hugely negative events for U.S. equities? Probably not, but we need some good news for the market to turn higher,” he said. Essaye predicted that as earnings season heats up next week, that good news will be on the offing, “ But until we get a solid run of earnings growth and macro data, the stocks will move sideways, if not down.”

Jay Hatfield, CEO and portfolio manager Infrastructure Capital Management, blames recent weakness in stocks on “normal October stock market behavior,” that is a result of increased short interest and a decline in buybacks that typically occur in the lead-up to earnings season. “We are going to be range bound for the next week or so as we find the bottom,” he said.

Which stocks were in focus?

General Electric Co. GE, +1.56%  shares climbed 1.6% in the wake of an FT report Wednesday that the conglomerate has won a $15 billion power-generation contract in Iraq.

Philip Morris International Inc. PM, +3.50%  shares rose 3.5% after the company beat earnings estimates for the third quarter.

United Rentals Inc. URI, -15.04% skidded 15% after the equipment-rental company beat Wall Street estimates for the quarter but said its outlook didn’t include a pending $2.1 billion acquisition.

Alcoa Corp. shares AA, +5.86%  rallied 5.9% after the company reported better-than-expected earnings.

Invesco Ltd. IVZ, +1.53%  rose 1.5%, after it announced the acquisition of OppenheimerFunds, a subsidiary of Massachusetts Mutual Life Insurance.

Endocyte Inc. shares ECYT, +50.39%  soared 50% after Novartis AG NVS, +1.13% NOVN, +0.42%  said it would buy the cancer-drug maker for $2.1 billion.

Shares of Travelers Cos. TRV, -1.03%  fell 1% even as it posted earnings and revenue above analyst expectations.

How did other markets trade?

Asian stocks were weaker with China’s benchmarks hitting multiyear lows and European markets fell in line with the global retreat.

Crude-oil prices CLX8, +0.50%  fell sharply, while gold prices GCZ8, +0.01%  settled marginally higher and the U.S. dollar index DXY, +0.01% firmed.

China’s main equity benchmarks on Friday produced their best daily gains since early August to end another ugly week on a high note, after Beijing officials offered apparently calming comments about the health of the economy following third-quarter gross domestic product that came in weaker than expected.

The Shanghai SHCOMP, +2.58%  gained 2.6% to mark its best one-session rise since Aug. 7, according to FactSet data, while the small-capitalization Shenzhen Composite 399106, +2.58% also jumped 2.6%, representing its best session since Aug.9. Both indexes were down solidly to start Friday’s session.

For the week, however the Shanghai index marked its second straight weekly drop, falling 2.2%, At its current pace, the Shanghai is tracking its worst month, down 9.6%, since January of 2016 when it fell 23%. The Shenzhen, meanwhile, closed the week off 2.5%, logging its third consecutive weekly loss, while the stock gauge also is looking at its steepest weekly fall, off 12.3%, since the first month of 2016.

China’s GDP grew 6.5% from the same quarter a year earlier, down slightly from 6.7% growth in the previous quarter and off analysts' expectations of a 6.6% growth. The pace was China’s worst since the first quarter of 2009. But investors were apparently heartened by statements from Chinese banking regulators to remain calm.

Vice Premier Liu said in an interview with the state-run Xinhua News Agency that Beijing values a healthy stock market, and financial regulators have recently announced new reform measures.

Liu said China attaches importance to the health of its stock market, and said U.S.-China trade clashes were affecting sentiment. “Frankly, the psychological impact is bigger than the actual impact,” he said.

Liu’s comments follow those from People’s Bank of China governor and banking and securities regulators, who all called on investors to maintain their composure. Guo Shuqing, the banking and insurance chief, said recent “abnormal fluctuations” in Chinese stock markets don’t reflect the country’s economic fundamentals and “stable financial system,” the Wall Street Journal reported.

Read: China’s growth slows to weakest pace since financial crisis

Hong Kong stocks also enjoyed a rebound on the day, with the Hang Seng Index HSI, +0.42%  closing 0.4% higher, after falling almost 1% earlier. The index fell 1% for the week, ringing up its fourth straight weekly loss. Tencent shares 0700, +0.36%  gained 0.6%, sunny and Sunny Optical 2382, +1.03% finished the session up 0.8%, both stocks reversed earlier sharp declines.

Japan’s Nikkei NIK, -0.56% however, closed down 0.6%, as the machinery sector sank, with manufacturer Komatsu 6301, -3.12% shedding 3.1%. The Nikkei booked a weekly slide of 0.7%, its third straight. Meanwhile, in tech, Sharp Corp.’s stock fell by 3.4% 6753, -3.37%  and those for Nintendo 7974, -3.96% fell 4% amid gains in the Japanese yen earlier in Asian hours.

In other benchmarks, South Korea’s Kospi SEU, +0.37% rose 0.4%, Taiwan’s Taiex Y9999, -0.35% slid about 0.4%, Australia’s ASX 200 XJO, -0.05%  receded 0.1%, while New Zealand’s benchmark NZ50GR, -1.22%  closed 1.2% lower. Benchmark indexes in Singapore STI, -0.35% and Malaysia FBMKLCI, -0.34% both finished modestly lower.