The U.S. added fewer jobs in July than expected, and June’s numbers were revised lower, showing the job market is slowing down. After this, traders increased their expectations for a September interest rate cut to 81.9%, according to CME’s FedWatch tool. The S&P 500 and Nasdaq hit their lowest levels in over two months, while the Dow dropped to a one-month low.
The CBOE Volatility Index, known as Wall Street’s “fear gauge,” jumped to its highest level in nearly six weeks, rising 20.66 points.
Eight out of 11 S&P 500 sectors fell, with consumer discretionary stocks dropping the most (down 3.4%) as Amazon’s stock fell 6.7%. Investors were disappointed with Amazon’s cloud business growth compared to strong results from AI-focused companies like Alphabet and Microsoft.
Technology and communication services sectors also fell, dropping 1.9% and 1.5%, respectively.
Apple’s revenue forecast for the next quarter beat expectations, but CEO Tim Cook warned that U.S. tariffs would add $1.1 billion in costs. Apple shares dipped 0.2%.
Most big tech stocks also fell, including Nvidia (down 3.1%), Tesla (down 2.6%), Meta (down 2.5%), and Alphabet (down 1.4%).
The big losses of the day pushed the S&P 500 and Nasdaq toward weekly declines, wiping out earlier gains from signs of a strong economy, AI growth, and important U.S. trade deals with the European Union and South Korea.
