The Dow Jones Industrial Average (DJIA) hit the day’s low of 43,340.68, falling by 1.7% around 10:09 a.m. EDT (7:40 India time). Over the last five sessions, this index has fallen by over 3%.
The S&P 500 index was 1.6% lower while the Nasdaq Composite declined 2% around this time.
The Cboe Volatility Index which is the measure of volatility shot up 28% intraday to hit the sessions’ high of 21.32.
U.S. two-year yields dropped 17 bps to 3.811% and were on track for its largest daily fall since April, according to Reuters report. The benchmark 10-year yield slid 9.3 bps to 4.267% .
Here are 3 reasons for US stocks’ Friday fall:
1) July payroll data:
The world’s largest economy created fewer jobs than expected in July, increasing the odds that the Federal Reserve will resume cutting interest rates at its September meeting.Nonfarm payrolls increased by 73,000 jobs last month after rising by a downwardly revised 14,000 in June, Reuters reported quoting the data. Economists polled by Reuters had forecast payrolls increasing by 110,000 jobs after rising by a previously reported 147,000 in June, the report said, highlighting that May was also revised downward.
2) Trump tariffs
A range of new tariffs will come into effect in a week’s time with Trump setting the effective date on August 7. The levy will apply on dozens of US’ trade partners including India. President Donald Trump on Thursday unveiled an array of import levies that range as high as 41% on Syria and 25%-35% on Canadian imports. There will be a 25% tariff on India imports to the US.
3) Amazon Earnings
Amazon shares fell 6% on Nasdaq while falling over 7% in Europe after the company missed expectations for its cloud computing unit when the competitors had beaten Wall Street forecasts.
Its net sales increased 13% to $167.7 billion in the second quarter, compared with $148.0 billion in second quarter 2024. Excluding the $1.5 billion favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 12% compared with second quarter 2024. Operating income increased to $19.2 billion in the second quarter, compared with $14.7 billion in second quarter 2024.
In its Q3 guidance, it said that the net sales are expected to be between $174.0 billion and $179.5 billion, or to grow between 10% and 13% compared with third quarter 2024. “This guidance anticipates a favorable impact of approximately 130 basis points from foreign exchange rates,” the company filing to the exchanges said.
Other major stocks like Apple Inc, American Express, Cisco Systems fell between 2% and 1%.
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