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The U.S. stock market saw a big drop on Friday after a disappointing jobs report raised fears of an economic slowdown. The fall was worsened by a decline in tech shares, especially Amazon. By early afternoon, the Dow Jones was down by over 600 points. The S&P 500 fell nearly 2 per cent, and the NASDAQ dropped over 2 per cent.
The Labour Department’s jobs report for July showed that only 73,000 jobs were added last month. This was far below the expected 106,000. Even worse, the jobs added in June were revised sharply down to just 14,000 from the previously reported 147,000. The unemployment rate also rose from 4.1 to 4.2 per cent. Economists said the report painted a weaker picture of the job market than expected. The manufacturing sector looked especially weak, and past government hiring numbers were revised lower.
Some analysts believe this weak report could push the Federal Reserve to cut interest rates sooner. But it will depend on whether inflation also slows down in the coming months. The Fed kept interest rates steady this week for the fifth meeting in a row. Fed Chair Jerome Powell said they would stay cautious, despite pressure from President Trump to cut rates quickly to support growth.
At the same time, inflation remains above the Fed’s 2 per cent target. Some goods are becoming more expensive due to new tariffs. This week, Trump signed an order to raise tariffs on imports from many countries. New duties of 15 per cent will hit major economies like Japan, South Korea, and the EU. Other countries with trade surpluses will face 10 per cent tariffs. Brazil will get the highest rate at 50 per cent. Canada will see 35 per cent duties on goods that don’t meet rules under the US-Mexico-Canada Agreement. These tariffs will take effect on August 7. Mexico, however, got a 90-day delay to work out a deal.
In company news, Amazon shares dropped after it gave weak guidance for the next quarter. Sales from its cloud division AWS rose by 17.5 per cent to $30.9 billion. This was slightly better than expected, but not enough to ease investor concerns about slowing growth and possible market share loss.
Apple shares also dropped after initially rising. The iPhone maker posted strong results, helped by a rebound in China and record-high services revenue. But investors remain unsure about Apple’s slow progress in AI. Analysts at Wedbush said Apple may need to make big acquisitions like Perplexity AI to compete in the space.
Coinbase stock dropped after it reported lower profits due to slower crypto trading. Meanwhile, Reddit stock surged after the company predicted stronger sales in the next quarter. Its AI-powered ad tools are expected to boost digital ad growth.
Oil companies Exxon Mobil and Chevron also declined, even though their production levels were up. Lower crude prices weighed on their overall results. Colgate-Palmolive lost early gains despite beating estimates. Kimberly-Clark rose as demand for its basic products like Huggies and Kleenex stayed strong.
Overall, weak job data and poor tech earnings sent a wave of worry through Wall Street. Investors are now watching inflation and future Fed decisions more closely as economic uncertainty grows.