U.S. stocks tumbled on Friday, with the S&P 500 recording its biggest daily percentage decline in over two months, as hefty tariffs slapped on dozens of countries by President Donald Trump and an unexpectedly weak jobs report raised concerns over a weakening economy. All three major indexes ended in negative territory.
The Dow Jones Industrial Average (DJI) slid 1,2% or 542.40 points, to finish at 43,588.58 points. Â
The S&P 500 declined 1.6%, or 101.38 points, to end at 6,238.01 points, posting its worst day since May 21. Consumer discretionary, tech and financial stocks were the worst performers.
The Consumer Discretionary Select Sector SPDR (XLY) declined 2.4%. The Financials Select Sector SPDR (XLF) and the Technology Select Sector SPDR (XLK) slid 2.2 and 1.9%, respectively. Eight of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq fell 2.2%, or 472.32 points, to close at 20,650.13 points, recording its biggest single-day decline since April 21.
The fear gauge CBOE Volatility Index (VIX) was up 21.89% to 20.38. Decliners outnumbered advancers on the NYSE by a 2.17-to-1 ratio. On the Nasdaq, a 2.69-to-1 ratio favored declining issues. A total of 19.51 billion shares were traded on Friday, higher than the last 20-session average of 18.44 billion.
Trump signed an executive order hours before the Aug. 1 tariff deadline and slapped hefty duties on several trading partners of the United States, including Brazil, Canada, India and Taiwan, as these countries scrambled to work out fairer trade deals.
Investors grew concerned once again as they believe that hefty tariffs could weigh on an already weakening economy and push inflation further up.
Investors’ confidence took a further hit after fresh data showed that jobs growth unexpectedly slowed in July, while June’s numbers were downwardly revised, suggesting that the labor market is likely shrinking.
Bank stocks took a hit on concerns that a slowing economy could impact loan growth. Shares of JPMorgan Chase & Co. (JPM) fell 2.3%, while Bank of America Corporation (BAC) and Wells Fargo & Company (WFC) declined 3.4% and 3.5%, respectively.
This, however, raised hopes that the Federal Reserve will cut interest rates in its September policy meeting.
The weak jobs data raised market expectations of a 25-basis-point rate cut in September to 86.5%, according to the CME’s FedWatch Tool, up from 37.7% in Thursday’s session.
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