Global Markets Tumble Amid Tariff Shock, Weak Jobs Data, and Sector-Wide Sell-Off

Wall Street plunged as new U.S. tariffs and dismal job growth triggered investor panic, with tech, airlines and oil services hit hardest; global markets followed suit.

The Nasdaq plunged 472.32 points (2.2%) to 47,231.61, the S&P 500 tumbled 101.38 points (1.6%) to 6,238.01 and the Dow slumped 542.40 points (1.2%) to 43,588.58.

Wall Street saw a sharp sell-off as investors reacted to the economic implications of President Trump's newly announced tariffs which range from 10% to 41%. A 40% tariff will target goods transshipped to dodge existing duties, surprising markets that expected a delay. Russ Mould of AJ Bell noted that investors now face the challenge of reassessing company impacts. The mood worsened following a disappointing Labor Department report showing weaker-than-expected job growth in July. Combined, these factors fueled uncertainty and risk aversion.

The Labor Department reported that non-farm payrolls rose by just 73,000 in July, falling short of the 110,000 jobs expected by economists. Job growth for May and June was also revised downward by a combined 258,000 jobs. May saw only a 19,000-job increase while June added just 14,000. Meanwhile, the unemployment rate edged up to 4.2% in July, in line with forecasts.

Amazons (AMZN) shares dropped steeply by 8.3% after reporting better than expected second quarter results but providing disappointing operating income guidance for the current quarter. Airline stocks turned in some of the market's worst performances, with the NYSE Arca Airline Index plummeting by 4.3%. oil service stocks were substantially weak amid a steep drop by the price of crude, as reflected by the 3.5% plunge by the Philadelphia Oil Service Index. Computer hardware, retail and banking stocks too saw significant weakness while pharmaceutical and housing stocks bucked the downtrend.

Asia-Pacific stocks moved mostly lower. Japan's Nikkei 225 Index declined by 0.7% while Hong Kong's Hang Seng Index slumped by 1.1%. The major European markets too moved significantly moved downward while the French CAC 40 Index plummeted by 2.9%, the German DAX Index plunged by 2.7% and the U.K.'s FTSE 100 Index slid by 0.7%.

In the bond markets, treasuries surged in reaction to the weaker than expected jobs data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, plunged 14 bps to a three-month closing low of 4.22%.

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