Stock markets dived Friday following weak US jobs data that raised doubts about the world鈥檚 biggest economy as president Donald Trump moves forward with additional tariffs.
Major US indices finished down 1.2 per cent or more after spending the entire day in the red. Major indices in Asia and Europe also fell, with Paris and Frankfurt losing nearly three per cent.
The dollar fell sharply against other key currencies while oil prices plunged on fears that a weakening US economy would sap demand.
The Labour Department said the US economy added just 73,000 jobs in July, while the unemployment rate rose to 4.2 per cent from 4.1 per cent. The department also cut the job gains from June and May by nearly 2,60,000 jobs.
鈥業nvestors are getting a bit worried that this economy is softening more rapidly than we earlier thought,鈥� said Sam Stovall of CFRA Research.
The report comes at a moment when investors had been questioning whether the market was overvalued following a series of records in recent weeks.
鈥楾here鈥檚 a lot of excuses to do some selling. The primary one today is the payrolls data,鈥� said Briefing.com analyst Patrick O鈥橦are.
Following the jobs data, yields on US Treasury bonds fell sharply as markets price in a weaker US growth outlook and expected cuts in Federal Reserve interest rates.
鈥楾he market thinks the Fed needs to cut rates and will cut rates in September because of the data,鈥� said O鈥橦are, who also pointed to 鈥榙isappointing price action鈥� in the market following generally strong earnings from large tech companies.
The jobs data came as Trump鈥檚 long-telegraphed August 1 tariff deadline arrived.
Trump announced late Thursday that dozens of economies, including the European Union, will face new tariff rates of between 10 and 41 per cent.
However, implementation will be on August 7 rather than Friday as previously announced, the White House said. This gives governments a window to rush to strike bilateral deals with Washington setting more favourable conditions.
鈥楾he US payrolls data has eclipsed news about the latest tariff rates applied to the world鈥檚 economies by Donald Trump, and is now dominating markets,鈥� said Kathleen Brooks, research director at XTB trading group.
Some trading partners have reached deals with the United States 鈥� including Britain, the European Union, Japan and South Korea.
China remains in talks with Washington to extend a fragile truce in place since May that is due to expire on August 12.
