U.S. stocks took a sharp hit on Friday, reeling from a double punch of President Donald Trump's aggressive new tariffs and a dismal jobs report. The Dow Jones Industrial Average sank 542 points, a 1.2% drop, while the S&P 500 and Nasdaq fell 1.6% and 2.2%, respectively.
According to ABC News, Trump signed an executive order late Thursday imposing tariffs on nearly 70 countries, with rates ranging from 10% to 41%. This move, paired with a jobs report showing just 73,000 jobs added in July, far below the yearly average of 130,000, sent investor confidence tumbling.
The jobs data also revised down earlier estimates, slashing May’s job gains to 19,000 from 139,000 and June’s to 14,000 from 147,000, per the Bureau of Labor Statistics. These stark corrections paint a troubling picture of an economy already strained by prior trade policies.
Trump’s latest trade salvo echoes reciprocal tariffs imposed on over 90 countries back on April 2, though with some tweaks in scope and rate. Originally delayed after triggering a stock selloff and spiking bond yields, those earlier duties were pushed back again in early July to an August 1 deadline.
The new tariffs, set to kick in on August 7, were touted by a Trump administration official as the start of a “new system of trade.” Yet, with markets already jittery, this bold claim feels more like a gamble than a guarantee.
Investors had largely brushed off tariff threats in recent months, with the Dow up 2%, the S&P 500 up 6%, and the Nasdaq up 8% this year. But Friday’s selloff suggests that patience may be wearing thin when harsh economic realities bite.
The jobs report didn’t just miss the mark; it obliterated expectations with downward revisions that call past optimism into question. Bret Kenwell, a U.S. investment analyst at eToro, told ABC News, “Today’s jobs report was underwhelming as it missed economists’ expectations, but it’s the stark revisions to the prior two months that really stands out.”
Kenwell’s point cuts deep, but let’s be frank: when numbers are slashed this drastically, it’s not just disappointing, it’s a signal that something’s fundamentally off. Painting over weak hiring with rosy forecasts won’t fix the underlying drag from trade disruptions.
Adding to the sting, a hotter-than-expected inflation reading on Thursday compounded the gloom. Kenwell noted this data “may have thrown some cold water on the rally,” and it’s hard to argue when markets are shedding gains this fast.
In a move that raised eyebrows, Trump fired Bureau of Labor Statistics Commissioner Erika McEntarfer on Friday, mere hours after the jobs report dropped. In a social media post, he accused her, without evidence, of having “faked” statistics, despite her bipartisan Senate confirmation in 2024.
Targeting a career official over inconvenient numbers smacks of deflection when leadership demands accountability. If the data is bad, firing the messenger won’t magically create jobs or calm Wall Street.
McEntarfer’s dismissal adds another layer of uncertainty to an already shaky economic landscape. When trust in institutions gets undermined, markets don’t just wobble, they brace for worse.
Friday’s market plunge signals a breaking point after months of resilience amid Trump’s trade maneuvers. While protecting American interests through tariffs might resonate with many, the collateral damage on hiring and investor sentiment can’t be ignored.
The economy isn’t a switch to flip with bold orders; it’s a complex machine that needs steady hands, not knee-jerk reactions. As tariffs loom and jobs falter, the path forward demands more than slogans; it requires a plan to balance trade goals with real growth.
With inflation creeping up and markets on edge, the coming weeks will test whether this “new system of trade” delivers stability or deeper chaos. For now, Americans watching their portfolios shrink can only hope the pain yields long-term gain.
