U.S. stocks ended slightly lower Friday as investors weighed economic worries against optimism over interest rate cuts by the Federal Reserve after data showed U.S. job growth weakened sharply in August.

Bank shares were among those taking the biggest hit, with the S&P 500 bank index ending lower.

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 after the data, as traders of futures tied to the Fed'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.

The major indexes ended well off their lows of the session.

"It's going to take more than one bad data set for us to dislodge this market at this point," said Pete Mulmat, CEO of IG North America, parent company of tastytrade, in Chicago.

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

According to preliminary data, the S&P 500 lost 20.52 points, or 0.32%, to end at 6,481.56 points, while the Nasdaq Composite lost 4.98 points, or 0.02%, to 21,702.72. The Dow Jones Industrial Average fell 209.73 points, or 0.46%, to 45,404.96.

"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."

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.

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

Shares of Kenvue fell sharply 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.