NEW YORK (AP) — Stocks slumped in morning trading on Wall Street Friday and Treasury yields fell sharply after the government reported a sharp slowdown in hiring last month.
Markets are also reacting to the latest tariff news. President Donald Trump once again extended the date at which punishing import taxes will take effect for a long list of countries. The tariffs are now expected to take effect Aug. 7 for countries that have yet to make a deal with the U.S.
The S&P 500 fell 1.5% and is on track to close the week with a loss. The Dow Jones Industrial Average fell 599 points, or 1.4% as of 9:44 a.m. Eastern. The Nasdaq composite fell 2%.
Worries on Wall Street about a weakening economy were heavily reinforced by the latest report on job growth in the U.S. Employers added just 73,000 jobs in July. That is sharply lower than economists expected. The Labor Department also reported that revisions shaved a stunning 258,000 jobs off May and June payrolls.
The surprisingly weak hiring numbers led investors to step up their expectations for an interest rate cut in September.
The yield on the 10-year Treasury fell to 4.24% from 4.39% just before the hiring report was released. The yield on the two-year Treasury, which more closely tracks expectations for Federal Reserve actions, plunged to 3.75% from 3.94% just prior to the report’s release.
The market is betting that the Fed may finally have to act to cut interest rates in order help bolster a weak jobs market. It has held rates steady since December. A cut in rates would give the job market and overall economy a boost, but it could also risk fueling inflation, which is hovering stubbornly above the central bank’s 2% target.
Wall Street is now betting that the Fed will cut rates at its September meeting. Traders see a 80% chance of a quarter-point rate cut at that meeting, up from just under 38% a day earlier.
Apple rose 0.3% following an encouraging earnings report.
Stocks in Europe and Asia also fell.
President Donald Trump says “there seems to be no reason” to meet with Chinese leader Xi Jinping as part of an upcoming trip to South Korea after China restricted exports of rare earths needed for American industry. The Republican president suggested Friday he was looking at a “massive increase” of import taxes on Chinese products in response to Xi’s moves. Trump says one of the policies the U.S. is calculating is "a massive increase of Tariffs on Chinese products coming into the United States." A monthslong calm on Wall Street was shattered, with U.S. stocks falling on the news. The Chinese Embassy in Washington hasn't responded to an Associated Press request for comment.
Most members of the Federal Reserve’s interest-rate setting committee supported further reductions to its key interest rate this year, minutes from last month’s meeting showed.
From Wall Street trading floors to the Federal Reserve to economists sipping coffee in their home offices, the first Friday morning of the month typically brings a quiet hush around 8:30 a.m. eastern, as everyone awaits the Labor Department’s monthly jobs report.
U.S. stocks are adding to their records as Wall Street cruises toward the finish line of another winning week. The S&P 500 rose 0.3% Friday and is heading for its seventh winning week in the last nine.
U.S. stocks edged up to more records. The S&P 500 rose 0.1% Thursday. The Dow Jones Industrial Average added 0.2%, while the Nasdaq composite climbed 0.4%. All three set all-time highs. Technology stocks helped lead the way after OpenAI announced partnerships with South Korean companies for its Stargate artificial-intelligence infrastructure project. Fair Isaac surged to its best day in nearly three years after unveiling a program where customers can potentially bypass big credit bureaus for FICO credit scores. Stock indexes also rose across much of Europe and Asia, while Treasury yields eased in the bond market.
U.S. stocks are drifting toward more records as Wall Street still doesn’t seem to care much about the latest shutdown of the U.S. government.
