U.S. stocks sink on tepid U.S. jobs data, erratic trade policies
The Dow Jones Industrial Average dropped 542.4 points, or 1.23 percent, to 43,588.58. The S&P 500 declined 1.6 percent to 6,238.01, and the Nasdaq Composite slid 2.24 percent to 20,650.13.
Losses were broad across the market, with eight of the 11 primary S&P 500 sectors closing lower. Consumer discretionary and technology stocks led the decline, falling 3.59 percent and 2.07 percent, respectively. Health care and consumer staples were among the few bright spots, rising 0.58 percent and 0.53 percent.
The U.S. economy added just 73,000 jobs in July, far below the 104,000 forecast. Previous months' job gains were also revised down sharply, and the unemployment rate rose to 4.2 percent from 4.1 percent in June.
U.S. President Donald Trump criticized the report as a "mistake," and announced the dismissal of Bureau of Labor Statistics Commissioner Erika McEntarfer. He also renewed criticism of Federal Reserve Chair Jerome Powell.
"This is a gamechanger jobs report. The labor market now looks a lot weaker than expected," said Heather Long, chief economist at Navy Federal Credit Union.
Bank of America warned that the data raised the risk of "bad cuts" by the Fed on Friday. Markets see a nearly 90 percent chance that the Federal Reserve will cut interest rates in September, according to the CME FedWatch Tool.
Markets were also rattled by a sweeping executive order signed by Trump on Thursday, which hiked tariffs on Canadian goods to 35 percent and set "reciprocal" tariffs on dozens of other countries.
Tech stocks were hit hard. Amazon dropped 8.27 percent despite posting better-than-expected second-quarter results. Apple declined 2.5 percent, reversing earlier gains after releasing strong earnings. Meta lost about 3 percent, while Nvidia, Microsoft, Alphabet, Broadcom, and Tesla all slid more than 1.5 percent.
"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," said Joseph Cusick, portfolio specialist at Calamos Investments.
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