McIlroy loses a club head and the lead in eventful 67 in first round at the BMW PGA Championship

VIRGINIA WATER, England (AP) — Rory McIlroy lost the club head on his 9-iron and then lost a chance to take the first-round lead by going out of bounds on the last hole in an eventful 5-under 67 at the BMW PGA Championship on Thursday.

The No. 3-ranked McIlroy was two strokes off the lead held by No. 363-ranked Matthew Baldwin in the flagship event on the European tour, having bounced back well from the pain of being denied victory at his home Irish Open last week.

McIlroy had already produced a rare back-handed putt next to a water hazard to help salvage a par at No. 8 by the time he overcame a bizarre incident on the par-5 No. 12, which saw the head of his 9-iron detach from the shaft and fly down the fairway after McIlroy took his second shot.

The Northern Irishman said he didn’t even see the ball reach the green and settle inside 7 feet from the pin to set up one of his seven birdies.

“It was a bit of a weird feeling,” McIlroy said. “Obviously you’re expecting the weight of the club to just pull through and there was nothing there.”

McIlroy got the 9-iron fixed and had it back in the bag by the 16th hole, ahead of two par 5s that complete the West Course at Wentworth. He made par at No. 17 despite hooking his drive into the trees but dropped a shot at the last when he hit his second shot to the right of the green and into the trees, the ball eventually reaching a pathway that was OB.

A bogey dropped McIlroy out of a share of the lead at the time with Denmark's Niklas Norgaard (66), who won the British Masters this month for his first European tour title.

Baldwin was among the afternoon starters and went one better than Norgaard, with a tap-in birdie at No. 18 completing a bogey-free 65.

A tie for 12th at the Czech Masters last month and a tie for 18th at the British Masters was a return to form for the unheralded Baldwin after four straight missed cuts across June and July.

“It was lovely,” the Englishman said. “I feel like my game is pretty strong for a while, and to actually put it into a performance is nice.”

Thomas Detry, also playing in the afternoon, shot 66 to share second place with Norgaard.

McIlroy was playing four days after a runner-up finish at the Irish Open to Rasmus Hojgaard, who closed with three straight birdies to beat the local hero on Sunday.

“The nice thing about disappointments is that if you have something in this next week, it’s nice to keep busy and keep your mind focused on something else,” the 35-year-old McIlroy said.

McIlroy was in a tie for fourth in a large group that contained fellow Ryder Cup players Shane Lowry and Robert MacIntyre, 2021 champion Billy Horschel as well as Victor Perez of France, who also bogeyed No. 18 — after hitting his second into the water in front of the green — to drop out of the lead.

AP golf: https://apnews.com/hub/golf

Tommy Fleetwood attends the day one of the BMW PGA Championship at Wentworth Golf Club in Virginia Water, Surrey, England, Thursday, Sept. 19, 2024. (Zac Goodwin/PA via AP)

Shane Lowry attends the day one of the BMW PGA Championship at Wentworth Golf Club in Virginia Water, Surrey, England, Thursday, September 19, 2024. (Zac Goodwin/PA via AP)

Danny Willett in action during the day one of the BMW PGA Championship at Wentworth Golf Club in Virginia Water, Surrey, England, Thursday, September 19, 2024. (Zac Goodwin/PA via AP)

Robert MacIntyre attends the day one of the BMW PGA Championship at Wentworth Golf Club in Virginia Water, Surrey, England, Thursday, September 19, 2024. (Zac Goodwin/PA via AP)

Billy Horschel in action on day one of the BMW PGA Championship at Wentworth Golf Club in Virginia Water, Surrey, England, Thursday, Sept. 19, 2024. (Zac Goodwin/PA via AP)

Rory McIlroy attends the day one of the BMW PGA Championship at Wentworth Golf Club in Virginia Water, Surrey, England, Thursday, September 19, 2024. (Zac Goodwin/PA via AP)

NEW YORK (AP) — Wall Street leapt to record highs as delayed jubilation swept across markets worldwide following the Federal Reserve’s big cut to interest rates. The S&P 500 jumped 1.7% Thursday, beating the all-time closing high it set in July. The Dow Jones Industrial Average rose 1.3%, also a record, and the Nasdaq composite climbed 2.5%. The gains followed rallies for markets across Europe and Asia. Some reports on the U.S. economy helped bolster hopes that it can manage to avoid a recession as the Fed continues to cut interest rates now that inflation is receding.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) — Wall Street is romping toward records Thursday as a delayed jubilation sweeps markets worldwide following the Federal Reserve’s big cut to interest rates.

The S&P 500 was up by 1.9% in late trading and above its all-time closing high set in July. The Dow Jones Industrial Average was up 580 points, or 1.4%, and on track to top its record set on Monday. The Nasdaq composite was 2.8% higher with an hour left in trading.

The rally was widespread, and the company behind Olive Garden and Ruth's Chris, Darden Restaurants, helped lead the way with a jump of 7.8%. It said sales trends have been improving since a sharp step down in July, and it announced a delivery partnership with Uber.

Nvidia, meanwhile, barreled 4.6% higher and was once again the strongest force lifting the S&P 500. Lower interest rates weaken criticism by a bit that its shares and those of other influential Big Tech companies look too expensive following the frenzy around artificial-intelligence technology.

Wall Street's gains followed rallies for markets across Europe and Asia after the Federal Reserve delivered the first cut to interest rates in more than four years late on Wednesday.

It was a momentous move, closing the door on a run where the Fed kept its main interest rate at a two-decade high in hopes of slowing the U.S. economy enough to stamp out high inflation. Now that inflation has come down from its peak two summers ago, Chair Jerome Powell said the Fed can focus more on keeping the job market solid and the economy out of a recession.

Wall Street’s initial reaction to Wednesday’s cut was a yawn, after markets had already run up for months on expectations for coming reductions to rates. Stocks ended up edging lower after swinging a few times.

“Yet we come in today and have a reversal of the reversal,” said Jonathan Krinsky, chief market technician at BTIG. He said he did not anticipate such a big jump for stocks on Thursday.

Some analysts said the market could be relieved that the Fed’s Powell was able to thread the needle in his press conference and suggest the deeper-than-usual cut was just a “recalibration” of policy and not an urgent move it had to take to prevent a recession.

That bolstered hopes that the Federal Reserve can successfully walk its tightrope and get inflation down to its 2% target without a recession. So too did a couple reports on the economy released Thursday. One showed fewer workers applied for unemployment benefits last week, another signal that layoffs across the country remain low.

The pressure is nevertheless still on the Fed because the job market and hiring have begun to slow under the weight of higher interest rates. Some critics say the central bank waited too long to cut rates and may have damaged the economy.

Powell, though, said Fed officials are not in “a rush to get this done” and would make decisions on policy at each successive meeting depending on what the incoming data says.

Some investment banks raised their forecasts for how much the Federal Reserve will ultimately cut interest rates, anticipating even deeper reductions than Fed officials. Forecasts released Wednesday show Fed officials expect to cut interest rates by potentially another half of a percentage point in 2024 and another full point in 2025. The federal funds rate is currently sitting in a range of 4.75% to 5%.

Lower interest rates help financial markets in two big ways. They ease the brakes off the economy by making it easier for U.S. households and businesses to borrow money, which can accelerate spending and investment. They also give a boost to prices of all kinds of investments, from gold to bonds to cryptocurrencies. Bitcoin rose above $63,500 Thursday, up from about $27,000 a year ago.

An adage suggests investors should not “fight the Fed” and instead ride the rising tide when the central bank is cutting interest rates. Wall Street was certainly doing that Thursday. But this economic cycle has continued to break conventional wisdoms after the COVID-19 pandemic created an instant recession that gave way to the worst inflation in generations.

Wall Street is worried that inflation could remain tougher to fully subdue than in the past. And while lower rates can help goose the economy, they can also give inflation more fuel.

The upcoming U.S. presidential election could also keep uncertainty reigning in the market. A fear is that both the Democrats and Republicans could push for policies that add to the U.S. government’s debt, which could keep upward pressure on interest rates regardless of the Fed’s moves.

History may also offer few clues about how things may progress given how unusual the conditions are. This looks to have higher expectations for rate cuts than past easing cycles, according to strategists at Bank of America.

The economic conditions of this cycle one may resemble 1995 a bit, but unfortunately “no great analogs exist,” the strategists led by Alex Cohen wrote in a BofA Global Research report.

In the bond market, the yield on the 10-year Treasury edged up to 3.73% from 3.71% late Wednesday. The two-year Treasury yield, which more closely tracks expectations for Fed action, fell to 3.60% from 3.63%.

In stock markets aboard, indexes jumped even more across the Atlantic and Pacific oceans. They rose 2.3% in France, 2.1% in Japan and 2% in Hong Kong.

The FTSE 100 climbed 0.9% in London after the Bank of England kept interest rates there on hold. The next big move for a central bank arrives Friday, when the Bank of Japan will announce its latest decision on interest rates.

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

Trader Michale Conlon, right, works on the floor of the New York Stock Exchange as Federal Reserve Chair Jerome Powell's news conference appears on a television screen behind him, Wednesday, Sept. 18, 2024. (AP Photo/Richard Drew)

The news conference of Federal Reserve Chair Jerome Powell appears on television screens on the floor of the New York Stock Exchange, Wednesday, Sept. 18, 2024. (AP Photo/Richard Drew)

Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, Sept. 19, 2024. (AP Photo/Ahn Young-joon)

A currency trader talks on the phone near a screen showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, Sept. 19, 2024. (AP Photo/Ahn Young-joon)

Specialist Genaro Saporito, foreground, works with traders at his post on the floor of the New York Stock Exchange, Wednesday, Sept. 18, 2024. (AP Photo/Richard Drew)

The news conference of Federal' Reserve Chair Jerome Powell appears on a screen as trader Neil Catania works on the floor of the New York Stock Exchange, Wednesday, Sept. 18, 2024. (AP Photo/Richard Drew)

Trader Leon Montana works on the floor of the New York Stock Exchange, Wednesday, Sept. 18, 2024. (AP Photo/Richard Drew)

Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, Sept. 19, 2024. (AP Photo/Ahn Young-joon)