Dow Drops 400 Points After Weak Jobs Report, U.S. Tariff Rollout

Stocks were under pressure on Friday to kick off August trading as investors weighed stark signs of a weakening economy and President Donald Trump’s modified tariff rates.

The July jobs report showed nonfarm payrolls expanded by 73,000 last month, well beneath the consensus estimate from economists polled by Dow Jones that called for a 100,000 increase to payrolls. Prior months were significantly revised down. June job growth totaled just 14,000, down from 147,000. The May count came down to 19,000 from 125,000, signaling the labor market has been weakening for a while now.

The numbers increased the odds that the Fed could act sooner than expected to cut rates and prop up the economy, a notion that helped stem stock losses. Traders place the likelihood of a September rate cut at 63% after the jobs figures, according to CME fed futures trading. That’s a reversal from Wednesday, when the odds plummeted after Fed Chair Jerome Powell signaled the central bank needs to wait and evaluate the impact of tariffs on inflation before cutting.

Not helping sentiment overnight were Trump’s updated duties ranging from 10% to 41% overnight at the Aug. 1 deadline. Goods that have been transshipped in a bid to avoid the tariffs will face another 40% levy, according to the White House.

Probably most shocking to markets was that for Canada, one of the U.S.′ biggest trading partners, goods imported into the country will now have a 35% levy, up from 25%.

Shares of Amazon tumbled more than 7% after the e-commerce giant provided light operating income guidance for the current quarter. Not all tech news was bad as Apple shares jumped 2% on the back of an earnings and revenue beat.

Stocks are coming off of a lackluster trading session, which saw the S&P 500 notch its third straight losing day as solid earnings from Microsoft and Meta Platforms failed to lift the broader market. Both the S&P 500 and Nasdaq had hit intraday records earlier in the session until the tech-fueled rally fizzled.

It was a decent month for stocks, however. The S&P 500 ended July up 2.2%, while the Nasdaq logged a 3.7% advance. The 30-stock Dow eked out a slim gain of less than 0.1%.

Week to date, the broad market index is on pace for an 0.8% loss, while the Dow is off 1.7%. The Nasdaq is tracking for an advance of less than 0.1%.