U.S. stock markets plummeted sharply on Friday following President Donald Trump’s new tariffs on imports from Canada, India, Brazil, and Taiwan. The Dow Jones fell 542 points (1.2%) and closed at 43,588.58. The S&P 500 dropped by 1.6% to 6,238.01, marking its worst performance since May. The Nasdaq also performed poorly, dropping 2.2% to 20,650.13, its largest decline since April.
Over the week, the S&P 500 dropped 2.36%, while the Nasdaq and Dow declined 2.17% and nearly 3%, respectively. Other market-centric fears also surged, evidenced by the volatility index (VIX) increasing to 20.38, its peak over the last month.
Amazon Sinks, Apple Warns of Tariff Cost:
The sharp fall of Amazon’s shares by 8.3% brought all of the major indexes down alongside it. Amazon’s quarterly cloud computing revenue results negatively impacted the consumer discretionary sector, which fell by almost 3.6%. Apple shares also fell by 2.5% despite the strong revenue forecast. Tim Cook, the CEO, stated that tariffs from the US would add $1.1 billion in costs this quarter.
Meanwhile, trading volume rose, with 19.51 billion shares changing hands. On the NYSE, the number of declining stocks was greater than the number of gaining stocks by more than two to one. The number of new lows on the NASDAQ outpaced new highs, sitting at 202 new lows compared to 29 new highs.
Weak Job Data Puts Pressure on Feds for Rate Cuts
The weaker July job data reveals that the US economy added fewer jobs than expected, leading to anxieties regarding the nonfarm payroll market. Nonfarm payroll data now seems to predict a positive shift toward a Federal Reserve rate cut in September. FedWatch now shows an 86.5% chance of a 25-basis-point cut, up from 37.7% the day before.
Analysts believe the Federal Reserve may have waited too long—just like last year—before cutting rates, and might now be forced to act quickly
Trump Gets Opportunity to Replace One Fed Official as the Pressure Mounts
Fed official Adriana Kugler has also announced her resignation. She will vacate her position on August 8, which means President Trump has the opportunity to select someone for the position. Trump has been urging the Fed, and in particular its chief, Jerome Powell, to lower the interest rates. Now all eyes are on how this change will impact the Fed’s decisions in the face of political and economic strain.
Kugler’s resignation as Fed Change Grows
Fed official Adriana Kugler will leave her job on August 8, which means President Trump has the opportunity to select someone for the position. Trump has been urging the Fed, and in particular it’s chief Jerome Powell, to lower the interest rates. Now all eyes are on how this change will impact the Fed’s decisions in the face of political and economic strain.
