There was a dramatic fall in Wall Street on Friday, the market erased over $1.1 trillion in its value in a single day. The Nasdaq Composite fell 2.24%, the S&P 500 fell 1.6%, and the Dow Jones Industrial Average weakened 1.23%, marking the worst day for the stocks market in the US for this month.
Weak Jobs Report Fuels Recession Fears
The July 2025 jobs report severely underperformed expectations, with only 73,000 additional new jobs against a forecast of 100,000. Furthermore, the Bureau of Labor Statistics reviewed May and June numbers downward by 250,000 jobs, growing concerns about a weakening labour market.
The unemployment rate rose to 4.2%, prompting doubts that the economy may be headed toward a slowdown or even a recession. Subsequent to the report, President Donald Trump fired BLS head Dr. Erika McEntarfercondemning her of political bias and data manipulation.
Sweeping New Tariffs Announced
President Trump declared new tariffs on imports from 68 countries and the European Union, ranging from 10% to 41%, to take effect on August 7.
Especially, Syria faces a 41% tariff, while tariffs on goods from Canada, India, Laos, and Switzerland will significantly increase. Markets responded negatively, with concerns that higher import costs will eat into corporate profits and trigger retaliatory trade measures.
Fed Tensions and Interest Rate Uncertainty
Amongst the market confusion, Trump smashed out at Federal Reserve Chair Jerome Powell, demanding instant rate cuts. He suggested the Fed board should supersede Powell if he refuses to act.
Despite market potentials now pricing in an 81.9% chance of a rate cut in September, Powell has signalled a cautious approach, adding further ambiguities.
Meanwhile, bond yields fell as investors rushed toward safe-haven assets.
Also Read: Donald Trump On US-India Trade Deal: “Very Big One” May Be Coming Soon
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