U.S. stocks plummeted on Friday, August 1, 2025, as investors grappled with a disappointing jobs report and the Trump administration’s aggressive new tariff policies.
The Dow Jones Industrial Average fell 542.40 points, or 1.23%, closing at 43,588.58.
The S&P 500 dropped 1.6% to 6,238.01, marking its worst day since May 21, while the tech-heavy Nasdaq Composite slid 2.24% to 20,650.13, its steepest decline since April 21.
The U.S. Labor Department reported that only 73,000 jobs were added in July 2025, significantly below economists’ expectations of 100,000 new jobs.
Compounding the concern, revisions to prior months’ data slashed a combined 258,000 jobs from May and June payrolls, with May’s job growth revised to 19,000 from 139,000 and June’s to 14,000 from 147,000.
The unemployment rate ticked up to 4.2%, signaling a broader slowdown in the labor market.
Analysts noted that the sharp downward revisions painted a bleaker picture of the U.S. economy than previously understood.
“Today’s jobs report was underwhelming, but it’s the stark revisions to the prior two months that really stand out,” said Bret Kenwell, U.S. investment analyst at eToro.
Trump’s Tariffs Reignite Economic Uncertainty
Adding to market jitters, President Donald Trump signed an executive order late Thursday imposing new tariffs on nearly 70 countries, effective August 7, 2025.
The tariffs range from 10% to 41%, with Canada facing a 35% levy and countries like Laos, Myanmar, and Syria seeing rates above 40%.
Imports from nations not targeted with these “reciprocal” tariffs will face a baseline 10% duty, consistent with Trump’s April announcement, which had been temporarily paused for trade negotiations.
The tariffs, described by a Trump administration official as the start of a “new system of trade,” have raised concerns about rising costs for businesses and consumers.
Companies like Walmart, Procter & Gamble, and Apple have warned that these import taxes will erode profits and drive up prices.
Apple, for instance, projects a $1.1 billion hit from tariffs in the current quarter.
The weak jobs data has intensified pressure on the Federal Reserve to cut interest rates at its September meeting.
The Fed maintained its key rate at 4.25% to 4.5% earlier this week, with Chair Jerome Powell emphasizing a “wait-and-see” approach due to persistent inflation above the 2% target.
However, Friday’s report shifted market expectations, with the CME FedWatch tool indicating an 87% probability of a quarter-point rate cut in September, up from 40% the previous day.
Some analysts, like Sam Stovall of CFRA, speculate that the Fed might consider a half-point cut or an earlier adjustment to support the faltering economy.
Broader Market and Economic Impacts
The sell-off capped a turbulent week for Wall Street, with the S&P 500 and Nasdaq posting their worst weekly declines since mid-May, down 2.4% and 2.2%, respectively.
The Dow recorded its largest weekly loss in four months.
Investors fled to safe-haven assets, pushing gold futures to $3,400 and driving a rally in U.S. Treasury bonds, with the 10-year Treasury yield falling to 4.22%.
The combination of a weakening labor market and escalating trade tensions has heightened fears of a broader economic slowdown.
“The market has been felled by a one-two punch of additional tariffs and weaker-than-expected employment data,” Stovall noted.
Trump’s Response and Market Outlook
President Trump dismissed concerns about the market’s reaction, claiming on social media that the jobs report was “rigged” to undermine his administration, though he provided no evidence.
He also fired the Bureau of Labor Statistics commissioner, Erika McEntarfer, further fueling market uncertainty.
Despite these claims, Trump expressed optimism, stating, “The markets are going to boom, the country is going to boom.”
However, economists warn that the tariffs could exacerbate inflation and disrupt global trade, with companies like Amazon and Apple already reporting challenges.
Amazon’s stock fell 8.3% despite strong quarterly results, while Exxon Mobil dropped 1.8% after reporting its lowest profit in four years.
With tariffs set to take effect next week, the economic outlook remains uncertain, and Wall Street is preparing for potential further disruptions.
Also Read: Economists Now Say Prices Will Continue To Rise, “This Is Just The Beginning”
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