US Markets Plummet as Jobs Data Misses Expectations
Dow Jones Suffers Significant Weekly Loss Amidst Economic Headwinds
Major US stock indices experienced a sharp downturn, with the Dow Jones, S&P 500, and Nasdaq Composite all registering significant losses. This decline follows a disappointing jobs report that fueled investor concerns about the health of the American economy.
Labor Market Shock Rattles Investors
The US labor market delivered a stark surprise, adding only 73,000 jobs outside of agriculture in July. This figure fell considerably short of the 104,000 jobs economists had predicted. Compounding the negative sentiment, employment figures for the two preceding months were collectively revised downward by a substantial 258,000 jobs.
“The customs capades leave clear brake tracks on the US labor market.”
—Thomas Gitzel, Economist, VP Bank
Economist Thomas Gitzel of VP Bank attributed the downturn to escalating tariffs, suggesting their dampening effect on economic development has been more pronounced than anticipated. These duties also pose a threat to inflation, potentially eroding real incomes and constraining consumer spending power.
Fed Uncertainty and Tech Sector Jitters
Further unsettling markets was the unexpected early resignation of Fed Governor Adriana Kugler, effective August 8. Her term was slated to conclude in January next year. The Federal Reserve faces mounting pressure from President Donald Trump to lower interest rates, while speculation also mounts regarding who will succeed current Fed Chair Jerome Powell when his term ends in May 2026.
Corporate Earnings Deliver Mixed Signals
On the corporate front, Amazon’s quarterly results proved a significant disappointment. While Microsoft and Meta had previously impressed investors, Amazon’s stock tumbled by over eight percent. Analysts expressed particular concern over the underperformance of its Cloud Computing platform, AWS.
Conversely, Apple garnered praise from analysts for its robust business figures. JP Morgan highlighted accelerated sales growth for both the iPhone and Mac lines. However, even Apple’s shares saw a 2.5 percent dip amidst the prevailing negative investor sentiment impacting tech giants.
Energy Sector Shows Resilience, Crypto Exchange Struggles
US oil company Chevron reported increased profits for the second quarter, buoyed by record production levels. Despite a moderation in its stock buyback pace, the company reaffirmed its full-year financial targets, and its shares performed well. Rival ExxonMobil also surpassed profit forecasts for the quarter, though its stock declined by 1.8 percent.
Coinbase, the largest US cryptocurrency exchange, saw its share price plummet by nearly eleven percent after reporting lower-than-expected second-quarter sales.
Reddit Soars on Strong Financials
In a notable contrast, Reddit shares surged by 17.5 percent. The social networking company announced its most profitable quarter to date, alongside a surprisingly strong sales forecast for the third quarter. These gains build upon significant upward movement observed the previous day.
Vaccine manufacturer Moderna experienced a 6.6 percent decline in its stock value after tempering its sales forecast for the current financial year.
