US stocks slumped on Friday after weak jobs data reignited fears of an economic slowdown and a wave of tariff announcements rattled European markets.
The S&P 500 declined 1.6% during its worst session since May. The Dow Jones Industrial Average gave up 540 points or 1.23%. The Nasdaq Composite shed 2.24% as Apple and Amazon both fell following trading updates.
Unexpectedly soft employment figures sent shudders through the market. Stocks fell along with the greenback and treasury yields after non-farm payrolls increased by just 73,000 last month, missing expectations for growth of at least 100,000. Compounding the unwelcome surprise, previously-announced figures from prior months were revised lower, indicating the jobs market had been slowing for some time. President Donald Trump responded by firing the head of the Labor Department's statistics bureau, alleging the figures were "rigged".
Traders were already nervy following solid falls on European markets in response to the latest round of US tariff announcements. Europe's stock benchmark, the Stoxx 600 index, skidded 1.89% to a six-week low after Trump announced tariff rates of up to 50% on a swag of trading partners. The new duty rates included a 35% rate on Canada, 25% on Indian and 39% on Switzerland. Stock benchmarks in Germany, France and Italy all lost at least 2.5%.
Amazon tumbled 8.27% as a downbeat forecast overshadowed a decent quarterly result. Apple lost 2.5% as the market mood soured.
“Traders are locking in gains as tech earnings fade, macro risks grow, and seasonality turns negative. Breadth is narrowing, valuations are stretched, and defensive positioning is quietly building,” Joseph Cusick, portfolio specialist at Calamos Investments, told CNBC.
Traders found havens in the health sector +0.58%, consumer staples +0.53% and utilities +0.12%. The biggest drags were consumer discretionary (Amazon) -3.59%, tech (Apple) -2.07% and energy -1.77%.
Friday's falls sealed a losing week for the major benchmarks. The S&P 500 gave up 2.4% during its worst week since May. The Dow shed 2.9% and the Nasdaq surrendered 2.2%.
Gold surged more than 2.2% on the spot market as the US dollar and treasury yields sank in anticipation of faster rate cuts as the US jobs marker slows. Spot gold rallied US$74.01 or 2.25% to US$3,362.51 an ounce. US gold futures settled US$51.20 or 1.5% higher at US$3,399.80. "Payrolls numbers came in below expectations... so, this gives a better probability that the Federal Reserve will cut later in the year, " Bart Melek, head of commodity strategies at TD Securities, told Reuters.
Oil slumped 2.83% on Friday ahead of a weekend meeting where the Organization of the Petroleum Exporting Countries and allies (OPEC+) agreed to hike production by 548,000 barrels per day from next month. The increase restores the last of 2.2 million barrels per day of production the group stripped from the market back in 2023 to prop up prices. Brent crude settled US$2.03 lower at US$69.67 a barrel ahead of the move, which was well telegraphed in advance. Gains earlier in the week ensured the international oil benchmark put on almost 6% for the week despite Friday's setback.
US copper steadied after plunging up to 22% on Thursday once it became clear that refined metals were excluded from US President Donald Trump's 50% tariff on copper imports. US copper futures edged up 0.17% to US$4.443 per pound - a far cry from the US$5.9585 hit two weeks ago as importers rushed to stock up ahead of the tariff's introduction on August 1. Copper on the London Metal Exchange firmed 0.2% to US$9,630.50 per metric ton. "Comex copper's premium is now only a few hundred dollars, which is still huge historically but nothing compared to the recent $3,000 premium," an unnamed metals trader told Reuters.
BHP and Rio Tinto emerged from Friday's market carnage with minimal damage as the pace of decline in iron ore prices slowed on Friday. Benchmark ore on the Dalian Commodity Exchange dipped 0.19% on Friday to US$108.60 a metric ton. The Chinese ore benchmark dived 2.1% the previous session to a two-week low. Prices deteriorated 2.1% across the week. BHP inched higher in both US and UK trade on Friday. Rio Tinto lost 0.2% - 0.26%.
Back home, the full-year earnings season cranks slowly into gear this week with updates from AMP, QBE, Afterpay-owner Block and others (more below). Earnings also look likely to dictate US trade during a light week for global economic data.
