05:10 PM EST, 11/20/2025 (MT Newswires) -- The Nasdaq Composite fell to its lowest level in more than two months on Thursday after a labor market report showed the unemployment rate hitting the highest level since 2021, while Nvidia ( NVDA ) reversed its post-earnings rally.

The Nasdaq plunged 2.2% at 22,078.1, its weakest close since Sept. 11. The S&P 500 shed 1.6% to 6,538.8, while the Dow Jones Industrial Average lost 0.8% to 45,752.3. Barring consumer staples, all sectors finished in the red, led by technology's 2.7% slump.

In economic news, total nonfarm payrolls in the US rose by 119,000 in September, the Bureau of Labor Statistics reported, more than the 51,000 increase expected in a survey compiled by Bloomberg. However, the unemployment rate edged up to 4.4%, the highest since October 2021, while Wall Street expected it to hold steady at 4.3%.

The report, which comes less than a month before the Federal Reserve's next monetary policy meeting, was delayed by nearly seven weeks due to the record-long federal government shutdown, which ended last week.

"We continue to think the Fed will ease in response to soft labor market conditions and a desire to get monetary policy in the vicinity of neutral," Morgan Stanley said in a report e-mailed to MT Newswires. "But the policy rate path remains highly data-dependent and, in our view, a mixed report means the committee will want to see more data before taking another step."

The probability that the Federal Open Market Committee will lower interest rates by 25 basis points next month increased to 40% on Thursday from 30% on Wednesday, according to the CME FedWatch tool. The odds of rates remaining unchanged fell to 60% from 70%.

"It looks as though the market may be focusing a little more on the unemployment rate creeping higher," said James Knightley, ING chief international economist in New York. "It is true to say that business surveys paint a gloomier picture of the jobs market, such as the (Automatic Data Processing) report and the (Institute for Supply Management) indicators, but we are going to need to see even more weakness to get the Fed to move in three weeks' time."

On Wednesday, minutes of the Fed's October meeting showed that monetary policymakers offered "strongly differing views" regarding the FOMC's interest rate decision for December, underscoring a growing divide among policymakers.

US Treasury yields were lower, with the 10-year rate down 4.3 basis points at 4.10% and the two-year rate dropping 4.2 basis points to 3.56%.

Nvidia ( NVDA ) shares fell 3%, among the steepest declines on the Dow. Shares of the technology bellwether opened higher on Thursday after the company reported strong quarterly results late Wednesday, but the rally lost steam by midday.

Nvidia's ( NVDA ) results and solid outlook indicate continuing artificial intelligence boom, but there are risks including customer concentration and geopolitics, Saxo Bank said in a report on Thursday.

"A large part of Nvidia's ( NVDA ) data center revenue still comes from a handful of hyperscale buyers and leading AI labs," Ruben Dalfovo, investment strategist at Saxo, wrote. "If any of them delay projects, press harder on pricing or shift more work toward in-house accelerators, Nvidia's ( NVDA ) growth rate could slow even if the wider AI trend stays healthy."

Shares of Micron Technology ( MU ) and Advanced Micro Devices ( AMD ) also fell. Both were among top decliners on the S&P 500. Cisco Systems ( CSCO ) was the worst performer on the Dow, down 3.8%.

Elsewhere in the corporate world, Palo Alto Networks ( PANW ) shares slumped 7.4%. The cybersecurity company late Wednesday increased its full-year outlook after recording better-than-expected fiscal first-quarter results. Palo Alto agreed to acquire cloud-native observability platform provider Chronosphere in a deal worth $3.35 billion.

Walmart ( WMT ) was the best performer on the Dow and the S&P 500, up 6.5%, as the retail giant raised its full-year outlook after its fiscal third-quarter results topped the Street's estimates.

West Texas Intermediate crude oil was down 0.3% at $59.27 a barrel in Thursday late-afternoon trade.

Gold was down 0.2% at $4,073.70 per troy ounce, while silver decreased 1.1% to $50.29 per ounce.