Wall Street slumps as Trump tariffs and weak jobs report spark selloff

U.S. stocks plunged on Friday, with the S&P 500 logging its biggest daily drop since May after President Trump imposed new tariffs on major trade partners and a weak July jobs report raised concerns over economic momentum.
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JEENAH MOON/Reuters

U.S. stocks slumped on Friday, and the S&P suffered its biggest daily percentage decline in more than two months as new U.S. tariffs on dozens of trading partners and a surprisingly weak jobs report spurred selling pressure.

Also weighing on equities was an 8.3% tumble in Amazon.com shares after the company posted quarterly results but failed to meet lofty expectations for its Amazon Web Services cloud computing unit.

Just hours before the tariff deadline on Friday, President Donald Trump signed an executive order imposing duties on U.S. imports from countries, including Canada, Brazil, India and Taiwan, in his latest round of levies as countries attempted to seek ways to reach better deals.

Further denting confidence in the economic picture, data showed U.S. job growth slowed more than expected in July while the prior month’s report was revised sharply lower, indicating the labor market may be starting to crack.

Fed rate cut bets surge after hiring slowdown

The report significantly pushed up expectations the Federal Reserve will cut interest rates at its September meeting.

“There’s no way to pretty-up this report. Previous months were revised significantly lower where the labor market has been on stall-speed,” said Brian Jacobsen, Chief Economist at Annex Wealth Management in Menomonee Falls, Wisconsin.

“Last year the Fed messed up by not cutting in July so they did a catch-up cut at their next meeting. They’ll likely have to do the same thing this year.” Market expectations the Fed will cut rates by at least 25 basis points at its September meeting stood at 86.5%, according to CME’s FedWatch Tool, up from 37.7% in the prior session.

Indexes post steep losses; volatility spikes

The Dow Jones Industrial Average fell 542.40 points, or 1.23%, to 43,588.58, the S&P 500 lost 101.38 points, or 1.60%, to 6,238.01 and the Nasdaq Composite lost 472.32 points, or 2.24%, to 20,650.13.

The S&P 500 recorded its biggest single-day percentage decline since May 21 while the Nasdaq suffered its biggest daily percentage drop since April 21.

For the week, the S&P 500 fell 2.36%, the Nasdaq declined 2.17%, and the Dow fell 2.92%.

The CBOE Volatility Index, also known as Wall Street’s fear gauge, closed up 3.66 points at 20.38, its highest close since June 20.

Amazon was the biggest drag on the Dow, S&P 500 and Nasdaq and pushed the consumer discretionary index, down nearly 3.6% as the worst performing of the 11 major S&P 500 sectors.

Also reporting earnings was Apple, which lost 2.5% after it posted a current-quarter revenue forecast well above Wall Street estimates, but CEO Tim Cook warned U.S. tariffs would add $1.1 billion in costs over the period.

Trump targets Labour Data Chief; Kugler exits Fed

Stocks briefly extended declines after Trump said he ordered the commissioner of the U.S. Bureau of Labor Statistics, Erika L. McEntarfer, to be fired in the wake of the jobs data.

“(Trump) didn’t seem to be disappointed with the last five jobs reports,” said Art Hogan, Chief Market Strategist, B. Riley Wealth, Boston, saying that the firing stood out as irregular.

“I think this is clearly something that happens in dictatorships, not in democracies.”

The Federal Reserve said Governor Adriana Kugler is resigning early from her term and will exit the central bank on Aug. 8, enabling President Donald Trump to select a new governor as he has ramped up pressure against Chair Jerome Powell recently to cut interest rates.

Declining issues outnumbered advancers by a 2.17-to-1 ratio on the NYSE, and by a 2.69-to-1 ratio on the Nasdaq.

The S&P 500 posted eight new 52-week highs and 29 new lows, while the Nasdaq Composite recorded 29 new highs and 202 new lows.

Volume on U.S. exchanges was 19.51 billion shares, compared with the 18.44 billion average for the full session over the last 20 trading days.

Published on August 2, 2025