U.S. Equity Benchmarks Slide Sharply on Growth Fears
Labor Market Softness Reinforces Fed Easing Odds
Nonfarm payrolls increased by only 73 000 in July—far below the 100 000 economists had anticipated—while May’s gain was revised down from 125 000 to 19 000 and June’s from 147 000 to 14 000, a cumulative 258 000-job reduction. Despite the unemployment rate holding at 4.2 %, these revisions underscore a cooling employment trend. Fed futures now place a 66 % probability on a quarter-point rate cut in September, up sharply from roughly 40 % before the report, and prediction markets like Kalshi assign a 75 % chance of such a move.
Tariff Escalation Intensifies Cost Pressures
Effective August 1, the Administration’s revamped “reciprocal” tariff framework slaps duties ranging from 10 % to 41 % on more than fifty nations. Canadian imports now face a 35 % levy (up from 25 %), India 25 %, Taiwan 20 %, and both Japan and South Korea 15 %. Products transshipped through third countries to circumvent duties will incur an extra 40 % surcharge. Corporations across manufacturing, retail and technology sectors report widespread uncertainty over sourcing and cost forecasting, contributing to the ISM Manufacturing PMI’s slide to 48.0 in July.
Technology Leaders Bear the Brunt
Amazon (AMZN) shares plunged 7.2 %, from $1 801.00 to close at $1 672.30, after cutting AWS profit guidance. Nvidia (NVDA) dipped 3.8 % to $930.50, pressured by valuation concerns despite surging AI demand. Meta Platforms (META) retreated 2.7 % to $345.10 and Alphabet (GOOGL) slid 1.6 % to $2 100.75. Tesla (TSLA) gave back 1.5 % to $820.60 on broader risk-off flows, while Apple (AAPL) bucked the trend, rising 2.0 % to $185.50 on stronger-than-expected iPhone revenue.
| Company | Ticker | Friday Close | Change |
|---|---|---|---|
| Amazon.com | AMZN | $1,672.30 | –7.2% |
| Nvidia | NVDA | $930.50 | –3.8% |
| Meta Platforms | META | $345.10 | –2.7% |
| Alphabet | GOOGL | $2,100.75 | –1.6% |
| Tesla | TSLA | $820.60 | –1.5% |
| Apple | AAPL | $185.50 | +2.0% |
Banking and Industrials Under Pressure
Major banks sold off sharply on fears of slower loan growth: JPMorgan Chase (JPM) fell 4.0 % to $184.20, Bank of America (BAC) lost 3.3 % at $30.10, Wells Fargo (WFC) dropped 3.7 % to $47.05, Goldman Sachs (GS) slid 3.5 % to $393.60 and Citigroup (C) declined 4.0 % at $55.20. In the industrial space, Caterpillar (CAT) and GE Aerospace (GE) both declined 3.0 %, closing at $300.10 and $115.40 respectively, as elevated tariff-driven input costs cloud capital expenditure outlooks.
| Name | Ticker | Close | Change |
|---|---|---|---|
| JPMorgan Chase | JPM | $184.20 | –4.0% |
| Bank of America | BAC | $30.10 | –3.3% |
| Wells Fargo | WFC | $47.05 | –3.7% |
| Goldman Sachs | GS | $393.60 | –3.5% |
| Citigroup | C | $55.20 | –4.0% |
| Caterpillar | CAT | $300.10 | –3.0% |
| GE Aerospace | GE | $115.40 | –3.0% |
Energy, Commodities and Fixed Income Snapshot
Chevron (CVX) reported Q2 net income of $2.49 billion, down 44 % year-on-year, and its stock dipped 0.45 % to $150.96. U.S. crude oil futures slid 2.66 % to $67.42 per barrel amid growth concerns. Gold rallied 1.57 % to $3 401.20 per ounce, while Bitcoin retreated 1.99 % to $114 457.81. The 10-year U.S. Treasury yield fell 14.6 basis points to 4.229 %, and the Dollar Index weakened 0.71 % to 96.10.
IPO Market: Volume Up, Proceeds Down
A total of 123 companies have gone public in 2025—a 48.2 % increase year-over-year—but aggregate proceeds of $19.7 billion are down 15 %. Circle Internet has soared 492 % since its June 5 debut, while Figma (FGMA) shares trade at $113.68, up 250 % from its $33 IPO price despite a 1.58 % dip on Friday. The influx of smaller, foreign-based flotations has diluted total capital raised, underscoring the need for selective participation.
Global Markets React Sharply
Asia-Pacific equities closed broadly lower as well: Hong Kong’s Hang Seng Index fell 1.07 % to 24 507.81, Japan’s Nikkei 225 lost 0.66 % to 40 799.60, South Korea’s Kospi plunged 3.88 % to 3 119.41, and Australia’s ASX 200 declined 0.92 % to 8 662.00. In Europe, the FTSE 100 slid 0.70 % to 9 068.00, Germany’s DAX dropped 2.50 % to approximately 15 260, and France’s CAC 40 fell 2.85 % to around 7 175. European pharmaceutical stocks were hit after U.S. pricing demands: Novo Nordisk declined 4 % and AstraZeneca fell 3.9 %.
Sentiment and Strategy: Caution Prevails
The University of Michigan’s consumer sentiment index inched up to 61.7 but remains 7.1 % below its July 2024 level. One-year inflation expectations fell to 4.5 %, the lowest since February, while five-year expectations dipped to 3.4 %. Retail investors surveyed by the AAII view stocks as overvalued by a 3 to 1 margin, with the VIX spiking 27.7 % to 21.35. In light of faltering growth, tariffs and tightening liquidity, a defensive tilt—favoring consumer staples, utilities, short-duration bonds and selective gold exposure—remains prudent until clearer economic and policy signals emerge.
