Stock market plummets to levels not seen since May, triggered by Trump's tariff announcements and disappointing U.S. employment figures.
The US job market showed signs of weakness in July, with the addition of only 73,000 jobs, significantly lower than the expected figure, according to the latest report on job growth. This weaker-than-expected employment data was a significant concern for Wall Street, reinforcing worries about a weakening economy.
The S&P 500 posted a 2.4 percent loss for the week, while the Dow Jones Industrial Average fell 1.2 percent. The Nasdaq composite saw a more pronounced decline, falling 2.2 percent. The market reacted to the latest tariff news, with President Trump announcing tariff rates on dozens of countries.
The employment data for May and June was also revised downward, resulting in a loss of jobs. The Labour Department revised the number of jobs added in May and June, shaving a total of 258,000 jobs off the payrolls. Sam Stovall, chief investment strategist at CFRA, stated that the market has been affected by a one-two punch of additional tariffs and weaker-than-expected employment data.
In late July 2018, the tariffs included increased rates on steel and aluminum, 30% tariffs on EU and Mexican goods, and preparations for extensive tariff hikes on numerous countries effective August 1. These trade actions contributed to market uncertainty and volatility during that period. The effective date of the tariffs being pushed back to August 7 further added to the uncertainty in the global trade picture.
The imposition and escalation of tariffs around this period caused increased market volatility due to uncertainty about trade relations and retaliatory measures. News of tariff threats and increases generally caused downward pressure on equities, particularly in sectors directly exposed to import costs and export risks, such as manufacturing, technology, and agriculture.
The decline in the US stock market marked a sharp shift from last week's record-setting streak of gains. The S&P 500's biggest decline since May occurred on Friday, with the index falling 1.6 percent. The US stock market had its worst day since May on Friday, with the Nasdaq composite also experiencing a significant drop.
The announcement of tariff rates on dozens of countries added more uncertainty to the global trade picture. The effective date of the tariffs being pushed back to August 7 did little to alleviate these concerns, as the potential for ongoing trade disputes and their impact on the economy remained a significant factor in market movements.
In conclusion, the weaker-than-expected job growth and the imposition of tariffs on various countries have contributed to a turbulent period in the US stock market. The ongoing uncertainty surrounding trade relations and their potential impact on the economy is likely to continue influencing market movements in the near future.
- The imposition and escalation of tariffs on various countries have raised concerns about the future of the economy, as they may impact businesses, particularly those in sectors like manufacturing, technology, and agriculture, which are directly exposed to import costs and export risks.
- The turbulence in the US stock market, marked by significant losses in indices like the S&P 500, Dow Jones Industrial Average, and Nasdaq, can be attributed to both the weaker-than-expected job growth and the uncertainty surrounding global trade relations, with the potential for ongoing trade disputes having a significant impact on the finance sector.
