U.S. equities dropped sharply on Friday following disappointing jobs data and mixed corporate earnings from major tech firms, including Amazon and Apple. Markets also reacted to a fresh wave of tariff announcements from the White House.
As of 09:35 ET, the Dow Jones Industrial Average was down 480 points, or 1.1%, the S&P 500 dropped 75 points (-1.2%), and the NASDAQ Composite shed 335 points, a 1.6% decline.
Labor Market Misses Expectations
The July jobs report revealed weaker-than-expected employment growth. The U.S. economy added just 73,000 jobs, well below forecasts for 106,000, while June’s figure was revised sharply lower to 14,000 from the previously reported 147,000. Meanwhile, the unemployment rate ticked up to 4.2% from 4.1%.
“There were massive net negative revisions over the prior two months (-258K) that wiped out much of the recent job growth,” said CIBC Economics. “The manufacturing sector now looks significantly weaker.”
The report could influence the Federal Reserve’s next move. Although the Fed held rates steady for a fifth consecutive meeting on Wednesday, Chair Jerome Powell faces growing pressure to cut rates amid signs of labor market softening—even as inflation remains above the central bank’s 2% target.
Tariff Tensions Rise Again
President Trump signed a new executive order Thursday increasing tariffs on dozens of countries. Nations with large trade surpluses with the U.S. will face duties of up to 10%, while countries like the EU, Japan, and South Korea will be hit with 15% tariffs. Brazil faces tariffs of 50%, and Canada will be subject to 35% on goods not compliant with the USMCA.
These tariffs will take effect at 12:01 a.m. on August 7. Mexico, however, received a 90-day extension to finalize a trade deal.
Tech Earnings: Amazon Falls, Apple Climbs
Amazon (NASDAQ: AMZN) shares dropped after issuing weaker-than-expected operating income guidance. While Amazon Web Services revenue grew 17.5% to $30.9 billion, slightly above estimates, investors were concerned about potential market share losses.
Apple (NASDAQ: AAPL) shares rose, however, after the company beat Q3 expectations, driven by strong iPhone sales and record services revenue, particularly in China.
Mixed Bag for Other Companies
- Coinbase (NASDAQ: COIN) fell as Q2 adjusted profit declined due to lower trading volume.
- Reddit (NYSE: RDDT) soared after projecting stronger Q3 revenue, fueled by its AI-driven ad platform.
- Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) gained 0.9% each, boosted by higher production despite lower oil prices.
- Colgate-Palmolive (NYSE: CL) rose after surpassing Q2 expectations.
- Kimberly-Clark (NASDAQ: KMB) climbed on solid demand for core products like Huggies and Kleenex.
Oil Prices Dip Slightly
Crude prices edged lower Friday as investors assessed the economic impact of the new tariff regime. At 09:35 ET, Brent crude slipped 0.3% to $71.47 per barrel, while WTI fell 0.2% to $69.12.
Despite the pullback, both benchmarks are on track for weekly gains of over 5%, supported by geopolitical tensions after Trump threatened sanctions on countries buying Russian oil, targeting China and India.
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