(Reuters) - A surprisingly weak U.S. employment report for June has turned Wall Street confidence on a soft landing into near panic that a recession is looming, prompting major firms to change forecasts for Federal Reserve easing this year to more aggressive interest rate cutting.

Employers added just 114,000 jobs in July, the U.S. Labor Department reportedon Friday, and the unemployment rate rose to 4.3%, from 4.1% in June, marking an unexpected deterioration in a labor market that had held up surprisingly well during the Federal Reserve's aggressive rate-hike campaign in 2022 and 2023.

The data prompted futures traders to pile into bets that the Fed will deliver a half-percentage-point rate cut at its Sept. 17-18 meeting, having priced in only 25 basis points for September before the jobs data.

Fed funds futures show the policy rate is expected to end 2024 in the 4.00%-4.25% range from the current 5.25%-5.50% where it has been since July 2023.

The three main U.S. stock indexes tumbled 2% or more and investors moved into safe-haven Treasuries, pushing yields sharply lower.

NEW FORECASTS (prior not available):

BOFA GLOBAL RESEARCH - Expects Fed to start cutting interest rates in September by 25 basis points vs December expected earlier. Sees rate cuts in September and December this year

JP MORGAN - Now expects Fed to cut rates by 50 bps at both September and November meetings, followed by 25 bps cuts at every meeting thereafter

GOLDMAN SACHS - Changes Fed forecast to three consecutive 25 bps cuts in September, November and December

CITI - Forecasts 125 bps in Fed cuts this year, 50 bps each in September and December

TD SECURITIES - Sees 75 bps easing in 2024, with 25 bp cuts each in September, November, December

BARCLAYS - Now expects the FOMC to cut rates by 25bp three times this year, in September, November, and December, and three times in 2025