NEW YORK: Wall Street’s main indexes led a global selloff on Friday as new US tariffs on dozens of trading partners weighed on sentiment, while a weaker-than-expected payrolls report added to risk aversion.
Just hours before the tariff deadline on Friday, President Donald Trump signed an executive order imposing duties on US imports from countries including Canada, Brazil, India and Taiwan, even as countries scrambled to seek ways to strike better deals.
Data showed US job growth slowed more than expected in July while the prior month’s report was revised sharply lower, pointing to a sharp moderation in the labor market.
“Everybody’s quite shocked at how large the downward revisions were for both May and June. The upside is that the unemployment rate did not spike meaningfully,” said Kevin Gordon, senior investment strategist at Charles Schwab.
The report perked up bets for a September interest rate cut to 80.0%, according to CME’s FedWatch tool.
BeiChen Lin, senior investment strategist at Russell Investments, said job growth has been mostly concentrated in previously understaffed sectors like healthcare and social assistance. “The breadth of job creation has steadily declined in recent months.”
At 11:39 a.m. ET, the Dow Jones Industrial Average fell 573.05 points, or 1.30%, to 43,557.93, the S&P 500 lost 93.99 points, or 1.48%, to 6,245.40 and the Nasdaq Composite lost 412.60 points, or 1.95%, to 20,709.85.
Both the S&P 500 and the Nasdaq were on track for their worst single-day performance since April 21.
Technology and communication services indexes fell 1.9% and 1.45%, respectively.
Apple posted its current-quarter revenue forecast well above Wall Street estimates, but CEO Tim Cook warned US tariffs would add $1.1 billion in costs over the period. The stock edged 2% lower.
Most major megacap stocks fell, with Nvidia down 1.6, Tesla lost 0.8%, Meta Platforms down 2.3%, and Alphabet losing 1.6%.
Financials shed 2%, with Coinbase Global sinking 15.6% after the crypto exchange reported a drop in adjusted profit for the second quarter. Bucking the trend, Reddit surged 21.9% after it reported quarterly results that exceeded Street expectations, boosted by an AI-focussed advertising strategy and strong user engagement.
Meanwhile, Trump said on Friday the Federal Reserve’s board should assume control if the central bank’s chair, Jerome Powell, continues to refuse to lower interest rates.
Declining issues outnumbered advancers by a 2.74-to-1 ratio on the NYSE, and by a 3.58-to-1 ratio on the Nasdaq.
The S&P 500 posted seven new 52-week highs and 26 new lows, while the Nasdaq Composite recorded 13 new highs and 183 new lows.