Global stocks tumble on weak US jobs report, looming Trump tariffs
AFP :
Stock markets around the world have fallen sharply after a disappointing US jobs report raised concerns about the strength of the global economy, just as President Donald Trump confirmed new tariffs on dozens of countries.
Major US indices finished down 1.2 percent or more after spending the entire day in the red. Major indices in Asia and Europe also fell, with Paris and Frankfurt losing nearly three percent.
The dollar fell sharply against other key currencies while oil prices plunged on fears that a weakening US economy would sap demand.
The Labor Department said the US economy added just 73,000 jobs in July, while the unemployment rate rose to 4.2 percent from 4.1 percent. The department also cut the job gains from June and May by nearly 260,000 jobs.
“Investors are getting a bit worried that this economy is softening more rapidly than we earlier thought,” said Sam Stovall of CFRA Research.
The report comes at a moment when investors had been questioning whether the market was overvalued following a series of records in recent weeks.
“There’s a lot of excuses to do some selling. The primary one today is the payrolls data,” said Briefing.com analyst Patrick O’Hare.
Following the jobs data, yields on US Treasury bonds fell sharply as markets price in a weaker US growth outlook and expected cuts in Federal Reserve interest rates.
“The market thinks the Fed needs to cut rates and will cut rates in September because of the data,” said O’Hare, who also pointed to “disappointing price action” in the market following generally strong earnings from large tech companies.
The jobs data came as Trump’s long-telegraphed August 1 tariff deadline arrived.
Trump announced late Thursday that dozens of economies, including the European Union, will face new tariff rates of between 10 and 41 percent.
However, implementation will be on August 7 rather than Friday as previously announced, the White House said.
This gives governments a window to rush to strike bilateral deals with Washington setting more favorable conditions.
“The US payrolls data has eclipsed news about the latest tariff rates applied to the world’s economies by Donald Trump, and is now dominating markets,” said Kathleen Brooks, research director at XTB trading group.