Weak US jobs data cemented expectations of an interest rate cut later this month on Friday, but stocks slid on worries about the economic outlook and profit-taking.
Wall Street鈥檚 three main indices opened in positive territory after official data showed the US economy added 22,000 jobs last month, down from July鈥檚 79,000 figure. But then they quickly turned lower.
Analysts had expected the figures to confirm a cooled labour market as companies pull back on hiring amid ongoing uncertainty over president Donald Trump鈥檚 tariffs.
Ahead of the figures, the market had already largely priced in an interest rate cut of a quarter percentage point, or 25 basis points, when the US Federal Reserve holds its monetary policy meeting later this month.
But the numbers were well below the 77,000 jobs analysts had expected.
All three major US indices ended lower with the S&P 500 down 0.3 per cent.
鈥楢n initially positive reaction to today鈥檚 weak payrolls report has given way to some classic 鈥榖uy the rumour, sell the fact鈥� action,鈥� said Chris Beauchamp, chief market analyst at investing and trading platform IG.
Oxford Economics moved up its projection for a Fed rate cut to September after previously predicting one in December.
鈥榃e don鈥檛 know how much longer this slowing of hiring is going to last,鈥� said Art Hogan of B. Riley Wealth Management.
The jobs data also sent the dollar and US Treasury yields lower, while gold hit a new record high.
Gold has benefitted as refuge for investors turning away from long-term bonds, which have recently been hit by concerns about debt sustainability.
Gloomy economic data has recently supported stocks as investors see it as boosting chances the Fed will cut interest rates, which is positive for businesses.
However, 鈥榓s concerns about the economy grow, we could see stocks struggle,鈥� warned Kathleen Brooks, research director at trading group XTB.
European stocks ended the day lower.
Tokyo also climbed after Trump signed an order to lower tariffs on Japanese autos to 15 per cent from 27.5 per cent.
Oil prices extended losses in anticipation of excess supply in the coming months as OPEC+ nations, which include Saudi Arabia and Russia, are expected to further unwind production cuts this weekend.
Oil has tumbled more than 12 per cent this year as global producers outside OPEC+ ramp up supply and tariffs curb demand.
Shares in Tesla climbed聽3.6 per cent after the board of the US electric vehicle maker proposed a pay package for CEO Elon Musk that could top $1 trillion if certain performance milestones are met.
