August 1st, 2025
Markets Slip as Tariffs Rise and Jobs Report Disappoints
Not a great start to August. Stocks are under pressure this morning following a double dose of negative headlines: new tariffs from the White House and weaker-than-expected U.S. jobs data. President Trump’s newly unveiled tariff regime—targeting a range of countries—has raised investor concerns about renewed economic headwinds, even as markets recently climbed to record highs. The lack of support from mega-cap tech is also weighing on sentiment. Amazon shares are down 7% after issuing a disappointing profit outlook, while Apple gave up earlier gains despite reporting strong sales.
Economic Takeaways:
- Compounding the cautious tone is a soft July jobs report, with only 73,000 jobs added last month and significant downward revisions to May and June figures. These data suggest notable labor market cooling and have increased expectations for Federal Reserve rate cuts, potentially as soon as September.
- The dollar is weaker against major currencies, and bond yields are falling across the curve, with the 10-year Treasury yield currently at 4.26%.
- The White House rolled out updated tariff rates ahead of today’s deadline, significantly increasing average U.S. tariffs on global imports. The new structure includes rates from 10% to as high as 41%, depending on the trade relationship. Countries hit hardest include Switzerland (39%), Canada (35%), South Africa (30%), and Taiwan (20%).
- The S&P 500 index suffered its first three-day losing streak since June 20 and heads into Friday down more than 0.5% for the week.
- Bitcoin (BTC) dropped 1.3% as broader market risk sentiment softened. Crypto-related stocks followed suit: Coinbase (COIN) tumbled nearly 10% after missing quarterly revenue estimates and reporting a decline in trading volumes, according to CNBC. MicroStrategy (MSTR) was also under pressure.
- Copper futures (/QC) collapsed 22% on Thursday—the largest single-day drop on record—after President Trump slapped a 50% tariff on semi-finished copper goods such as wires, pipes, and sheets. Prices regained about 0.6% early Friday.
- Rate-cut odds surged following the latest jobs report. The CME FedWatch Tool showed the probability of a September Fed rate cut climbing to 55%, up from below 40% just a day earlier.
- Despite recent market softness, earnings season has broadly exceeded expectations: 83% of reporting companies have beaten Q2 profit estimates, and 67% have topped revenue forecasts. The S&P 500 is on track for 8.5% year-over-year earnings growth—well above the 5.8% originally projected.
Trump Calls for Firing of BLS Commissioner After Weak Jobs Report and Major Revisions
President Donald Trump announced Friday afternoon via social media that he has instructed his administration to fire Bureau of Labor Statistics (BLS) Commissioner Erika McEntarfer, following the release of a disappointing July jobs report. The report, released Friday morning, revealed the U.S. economy added just 73,000 jobs last month—far below expectations—while the unemployment rate ticked up to 4.2%.
However, it was the dramatic downward revisions to the previous months’ employment data that sparked the strongest reaction. The BLS revised May’s job gains from 144,000 to just 19,000, and June’s from 147,000 to a mere 14,000—removing a combined 258,000 jobs from earlier estimates. In its official release, the BLS explained the changes were due to “additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.”
Economists broadly interpreted the data as a sign the labor market is weaker than previously understood. “The ‘solid’ state of the labor market described by the FOMC earlier this week looks more questionable after the July employment report,” wrote Wells Fargo senior economist Sarah House. The revisions bring the three-month average of job gains down to just 35,000.
Trump, clearly incensed, accused the BLS of political manipulation, writing on Truth Social: “Important numbers like this must be fair and accurate, they can’t be manipulated for political purposes.” He also referenced the February benchmark revision to 2024’s jobs data, which showed payrolls had been overstated by 818,000 jobs in the previous year. “The Economy is BOOMING under ‘TRUMP’ despite a Fed that also plays games, this time with Interest Rates, where they lowered them twice, and substantially, just before the Presidential Election, I assume in the hopes of getting ‘Kamala’ elected – How did that work out? Jerome ‘Too Late’ Powell should also be put ‘out to pasture.’”
On the Move
- Apple (AAPL) rose 1.8% in pre-market trading after CEO Tim Cook told CNBC the company is ramping up its artificial intelligence investments and is open to M&A opportunities. Apple’s last major acquisition was Beats Electronics in 2014 for $3 billion.
- Amazon (AMZN), meanwhile, plunged 8% ahead of the open as weaker-than-expected operating profit guidance overshadowed a better-than-forecast revenue outlook for the current quarter.
- Exxon Mobil (XOM) climbed nearly 0.7% after reporting stronger-than-expected earnings, aided by cost savings despite a 12% drop in revenue due to lower oil prices. Rival Chevron (CVX) also edged higher following its own earnings beat.
- Moderna (MRNA) fell 6.6% even after topping earnings and revenue expectations, as guidance left investors disappointed.
- Design software company Figma (FIG) continued to rally Friday morning after a blockbuster IPO debut Thursday that saw shares surge 250%.
- CSX (CSX) declined 1.4% amid speculation of a potential merger with Berkshire Hathaway’s (BRK.B) Burlington Northern Santa Fe (BNSF) railroad. Bloomberg reported CSX is exploring strategic options, while Barron’s suggested a potential deal could be worth around $80 billion—coming just days after Union Pacific (UNP) said it would acquire Norfolk Southern (NSC).
- Reddit (RDDT) jumped 13.7% after its earnings and forward guidance both beat Wall Street expectations.
- Roku (ROKU) slipped 3.4% despite beating estimates on both earnings and guidance. The company also announced a stock buyback program, which wasn’t enough to reverse early losses.
- Berkshire Hathaway shares moved little in early trading ahead of its earnings report tomorrow. The stock has lagged in recent months following Warren Buffett’s announcement that he will step down as CEO at the end of 2025. The company was in the spotlight earlier this week for trimming its stake in VeriSign (VRSN) and is now potentially involved in the developing BNSF-CSX merger narrative.
What’s Ahead
Investors should prepare for another packed calendar of earnings and economic data in the coming days, with several marquee names and industry bellwethers set to report.
Next week kicks off with June factory orders and a diverse set of earnings from consumer and tech-focused names including Tyson Foods (TSN), Hims & Hers Health (HIMS), Wayfair (W), and Palantir Technologies (PLTR). Investors will be watching for clues on consumer demand, supply chains, and AI adoption trends.
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