Wall Street Falls Sharply After Tariffs and Slowing Job Growth Spark Recession Fears

Wall Street suffered its steepest decline in more than two months on Friday as new U.S. tariffs and a disappointing jobs report rattled investors. The S&P 500 fell 1.6%, marking its worst daily performance since May 21, while the Nasdaq dropped 2.24% and the Dow Jones Industrial Average slid 1.23%.

The sell-off was fueled by President Donald Trump’s executive order imposing new duties on imports from key trading partners including Canada, Brazil, India, and Taiwan, just hours before the deadline. Adding to the turbulence, U.S. labor data showed job growth slowed sharply in July, raising concerns about the health of the economy.

📉 Market Performance at a Glance

♦ Dow Jones: ↓ 542.40 points (−1.23%) to 43,588.58

♦ S&P 500: ↓ 101.38 points (−1.60%) to 6,238.01

♦ Nasdaq Composite: ↓ 472.32 points (−2.24%) to 20,650.13

For the week, the S&P 500 lost 2.36%, the Nasdaq fell 2.17%, and the Dow dropped 2.92%.

The CBOE Volatility Index (VIX), known as Wall Street’s fear gauge, surged to 20.38 — its highest since June 20.

📊 Amazon Leads Declines

Shares of Amazon.com plunged 8.3%, the biggest drag on all three major indexes, after its quarterly results missed expectations for its cloud computing unit, AWS. The sell-off pulled down the consumer discretionary index by nearly 3.6%, the worst performer among the S&P’s 11 sectors.

Apple also weighed on markets, slipping 2.5% despite issuing a stronger-than-expected revenue forecast. CEO Tim Cook cautioned that U.S. tariffs would add $1.1 billion in costs this quarter.

💼 Weak Jobs Report Raises Fed Cut Hopes

The labor market added fewer jobs than forecast in July, while June numbers were sharply revised downward. Analysts said the data suggested the labor market is losing momentum, intensifying speculation that the Federal Reserve will cut interest rates in September.

“The labor market has been on stall speed,” said Brian Jacobsen, Chief Economist at Annex Wealth Management. “The Fed will likely have to act in September.”

Market pricing now indicates an 86.5% chance of at least a 25-basis-point rate cut next month, up from 37.7% a day earlier, according to the CME FedWatch Tool.

⚖️ Political Drama Adds to Market Jitters

Stocks briefly extended losses after President Trump announced the firing of U.S. Bureau of Labor Statistics Commissioner Erika L. McEntarfer, citing dissatisfaction with the jobs report. Analysts warned the move could undermine confidence in the integrity of government data.

“This is something we usually see in dictatorships, not democracies,” said Art Hogan, Chief Market Strategist at B. Riley Wealth.

Meanwhile, the Fed confirmed that Governor Adriana Kugler will resign on August 8, giving Trump another opportunity to reshape the central bank as he pressures Chair Jerome Powell for rate cuts.

📉 Breadth of Declines

Declining issues outnumbered advancers by more than 2-to-1 on the NYSE and nearly 3-to-1 on the Nasdaq. Trading volume was heavier than average, with 19.51 billion shares changing hands compared with the 20-day average of 18.44 billion.