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Fed policymakers say they are ready to cut interest rates

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Broadcom ( AVGO ) tumbles after downbeat Q4 revenue forecast

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Chip index set for biggest weekly drop since March 2020

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Indexes: Dow off 0.81%, S&P 500 down 1.47%, Nasdaq down

2.30%

(Updated at 11:44 a.m. ET/1544 GMT)

By Johann M Cherian and Purvi Agarwal

Sept 6 (Reuters) - Wall Street's main indexes fell to

their lowest in over three weeks on Friday after a crucial jobs

report did little to clear the uncertainty around the magnitude

of the Federal Reserve's interest rate cut expected at its

meeting later this month.

A Labor Department report showed U.S. employment increased

less than expected in August, but a drop in the jobless rate to

4.2% suggested an orderly labor market slowdown continued.

Traders' bets for a 25-basis point rate cut in September

stood at 73%, according to the CME Group's FedWatch Tool, while

those for a 50-bps reduction in rates were at 27%, down from a

brief rise to 51% after the data.

Rate-sensitive growth stocks such as Alphabet and

Tesla fell 2.8% and 5.4%, respectively, while Nvidia ( NVDA )

lost 4.4%, nearing the level of $100 last seen in early

August.

"There's uncertainty about what the Fed is going to do,"

said Melissa Brown, managing director of investment decision

research at SimCorp.

"We certainly would like to see rates come down, but on

the other hand could an aggressive move suggest that they see

something that makes them think the economy is worse off than we

thought?"

Meanwhile, some policymakers said they are ready to lower

interest rates at the Fed's meeting in two weeks, with one of

them saying he could support a bigger cut in borrowing costs,

should the cooling labor market need support.

The labor market has come under scrutiny after an unexpected

rise in the jobless rate sparked recession fears nearly a month

ago and had sent the tech-heavy Nasdaq down more than 10% into

correction territory and led to a selloff in global markets.

At 11:44 a.m. ET, the Dow Jones Industrial Average

fell 329.57 points, or 0.81%, to 40,426.18, the S&P 500

lost 81.01 points, or 1.47%, to 5,422.40 and the Nasdaq

Composite lost 393.51 points, or 2.30%, to 16,734.15.

All major sectors on the S&P 500 were trending lower, led by

a 2.6% drop in tech stocks.

Wall Street's three main indexes were on track for a weekly

loss. The benchmark S&P 500 was on course for a weekly drop of

more than 3%, its steepest decline in 18 months, led by a more

than 6% slide in technology stocks.

September has been historically weak for U.S. equities, with

the S&P 500 down about 1.2% for the month on average since 1928.

Broadcom ( AVGO ) shed 9.2% after the chipmaker forecast

fourth-quarter revenue slightly below estimates, hurt by

sluggish spending in its broadband segment.

Other chip stocks such as Marvell Technology ( MRVL )

dropped 5.1% and Advanced Micro Devices ( AMD ) shed 4.5%,

sending the Philadelphia SE Semiconductor index down

4.2%.

The semiconductor index is set for its biggest weekly drop

since March 2020.

Among others, Super Micro Computer ( SMCI ) dropped 6.4%

after brokerage J.P. Morgan downgraded the AI server maker's

shares to "neutral" from "overweight".

Declining issues outnumbered advancers by a 2.79-to-1 ratio

on the NYSE and by a 3.37-to-1 ratio on the Nasdaq.

The S&P 500 posted 16 new 52-week highs and 12 new lows,

while the Nasdaq Composite recorded 19 new highs and 134 new

lows.