(AP) -- World markets tumbled Friday on the tail of Wall Street's worst monthly loss since the beginning of the pandemic.
Shares dropped in Paris, London, Frankfurt and Tokyo. Shanghai and Hong Kong were closed for a holiday.
The S&P 500 ended September down 4.8%, its first monthly drop since January and the biggest since March 2020.
After climbing steadily for much of the year, markets have become unsettled with the spread of the more contagious delta variant of COVID-19, surging long-term bond yields and word that the Federal Reserve may start to unwind its support for the economy.
Rising inflation also has caused investors to reconsider recent high prices for shares, leading many to sell tech stocks that have soared during the pandemic.
Germany's DAX lost 0.8% to 15,134.21 and the CAC 40 in Paris slipped 0.8% to 6,465.81. London's FTSE 100 declined 1% to 7,013.74.
U.S. futures also retreated, with the contract for the Dow industrials shedding 0.7%. The future contract for the S&P 500 was 0.6% lower.
Japan lifted a pandemic state of emergency on Friday after seeing coronavirus caseloads decline as vaccinations picked up pace. A quarterly survey by the Bank of Japan found the mood among large Japanese manufacturers has risen to its highest level in nearly three years as companies look ahead to a recovery.
The results of the "tankan" survey, released Friday, found sentiment among large manufacturers rose to 18 from 14. That's the highest level since late 2018. The reading for nonmanufacturers edged up only slightly, to 2 from 1.
However, it and various other surveys have found manufacturers struggling with shortages of computer chips and other components, amid disruptions to supply chains and shipping that might crimp the rebound from the pandemic.
Tokyo's Nikkei 225 lost 681.59 points to 28,771.07, while the S&P/ASX 200 declined 2% to 7,185.50. The Kospi in Seoul lost 1.6% to 3,019.18. Shares also fell in Taiwan and Southeast Asia.
The S&P 500 lost 1.2% on Thursday but is still up 14.7% for the year. The Dow Jones Industrial Average shed 1.6%, while the Nasdaq slid 0.4%. Small company stocks also lost ground. The Russell 2000 index declined 0.9%.
The yield on the 10-year Treasury note, a benchmark for many kinds of loans, fell to 1.49% early Friday from 1.50%. It was as low as 1.32% just over a week ago.
In recent weeks, economic data has revealed that the highly contagious delta variant has crimped consumer spending and the job market's recovery.
The Labor Department reported that unemployment applications rose for the third straight week and were higher than economists anticipated. The Commerce Department upgraded its estimate of economic growth during the second quarter to 6.7%, which was slightly better than economists expected, but it expects growth to slow to 5.5% during the third quarter.
On Thursday, a bill to fund the U.S. government through Dec. 3 and avoid a partial federal shutdown cleared Congress. But the dispute between Democrats and Republicans over extending the nation's debt limit remains unresolved.
In other trading Friday, U.S. benchmark crude oil declined 74 cents to $74.29 per barrel in electronic trading on the New York Mercantile Exchange. It rose 18 cents to $75.03 per barrel on Thursday.
Brent crude oil dropped 65 cents to $77.66 per barrel.
The dollar slipped to 111.14 Japanese yen from 111.28 yen. The euro was unchanged at $1.1580.