September S&P 500 E-Mini futures (ESU25) are down -0.93%, and September Nasdaq 100 E-Mini futures (NQU25) are down -1.03% this morning as U.S. President Donald Trump’s sweeping import tariffs fueled concerns about the outlook for economic growth.
Nonfarm Payrolls: The latest figures suggest a potential weakening in the U.S. job market, as July saw fewer nonfarm payroll additions than anticipated, with only 73,000 new jobs, falling short of the 100,000 forecast. This was compounded by substantial downward revisions to the job growth numbers for May and June, totaling a combined 258,000 fewer positions than previously reported. Concurrently, the unemployment rate edged up to 4.2%, which was in line with expectations.
Late on Thursday, President Trump signed an executive order imposing tariffs between 10% and 41% on U.S. imports from foreign nations. Those hardest hit include Switzerland with a 39% tariff, Taiwan with a 20% tariff, and Canada, which is subject to a 35% levy on goods that do not comply with the U.S.-Mexico-Canada Agreement. Meanwhile, the U.S. president granted a one-week delay to trading partners that had received letters, with the exception of Canada. The average U.S. tariff would increase to 15.2% if the announced rates are implemented, according to Bloomberg Economics, up from 13.3% previously and well above the 2.3% level in 2024 before Trump took office.
Also weighing on stock index futures, shares of Amazon.com (AMZN) slumped over -7% in pre-market trading after the tech and online retailing giant projected weaker-than-expected Q3 operating income.
U.S. equity futures are also under pressure from rising Treasury yields after Trump said in a social-media post that the Fed’s board should “assume control” if Chair Jerome Powell doesn’t cut interest rates.
In yesterday’s trading session, Wall Street’s major indices closed lower. Align Technology (ALGN) plummeted over -36% and was the top percentage loser on the S&P 500 after the company posted downbeat Q2 results and issued below-consensus Q3 revenue guidance. Also, Arm Holdings (ARM) plunged more than -13% and was the top percentage loser on the Nasdaq 100 after the chip designer provided soft FQ2 adjusted EPS guidance. In addition, pharmaceutical stocks slumped after President Trump demanded that drugmakers slash U.S. prices, with Bristol-Myers Squibb (BMY) sliding over -5% and Merck & Co. (MRK) falling more than -4%. On the bullish side, Meta Platforms (META) surged over +11% and was the top percentage gainer on the Nasdaq 100 after the maker of Facebook and Instagram posted upbeat Q2 results and issued strong Q3 revenue guidance.
Data from the U.S. Department of Commerce released on Thursday showed that the core PCE price index, a key inflation gauge monitored by the Fed, came in at +0.3% m/m and +2.8% y/y in June, compared to expectations of +0.3% m/m and +2.7% y/y. Also, U.S. June personal spending rose +0.3% m/m, weaker than expectations of +0.4% m/m, and personal income rose +0.3% m/m, stronger than expectations of +0.2% m/m. In addition, the U.S. employment cost index rose +0.9% q/q in the second quarter, stronger than expectations of +0.8% q/q. Finally, the number of Americans filing for initial jobless claims in the past week rose +1K to 218K, compared with the 222K expected.
“Inflation remains sticky and justifies the Fed’s decision to keep interest rates unchanged at Wednesday’s meeting,” said Clark Bellin at Bellwether Wealth. “The stock market doesn’t need rate cuts in order to move higher and has already posted strong gains so far this year without any rate cuts.”
Meanwhile, U.S. rate futures have priced in a 61.0% probability of no rate change and a 39.0% chance of a 25 basis point rate cut at the next FOMC meeting in September.
Investors will also focus on U.S. Average Hourly Earnings data. Economists expect July figures to be +0.3% m/m and +3.8% y/y, compared to the previous numbers of +0.2% m/m and +3.7% y/y.
The U.S. Unemployment Rate will be reported today. Economists forecast that this figure will creep up a tick to 4.2% in July from 4.1% in the prior month.
The U.S. ISM Manufacturing PMI and the S&P Global Manufacturing PMI will be closely watched today. Economists expect the July ISM Manufacturing PMI to be 49.5 and the S&P Global Manufacturing PMI to be 49.7, compared to the previous values of 49.0 and 52.9, respectively.
U.S. Construction Spending data will be released today. Economists estimate this figure will be unchanged m/m in June, compared to -0.3% m/m in May.
The University of Michigan’s U.S. Consumer Sentiment Index will be released today as well. Economists expect the final July figure to be revised slightly higher to 62.0 from the preliminary reading of 61.8.
On the earnings front, notable companies like Exxon Mobil (XOM), Chevron (CVX), Enbridge (ENB), and Colgate-Palmolive (CL) are slated to release their quarterly results today. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +4.5% increase in quarterly earnings for Q2 compared to the previous year, exceeding the pre-season estimate of +2.8%.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.391%, up +0.71%.
The Euro Stoxx 50 Index is down -1.84% this morning as sentiment took a hit following U.S. President Donald Trump’s announcement of steeper tariffs on dozens of countries. Healthcare stocks led the declines on Friday after Trump sent letters to 17 major pharmaceutical firms, including Novo Nordisk and Sanofi, urging them to reduce drug prices for U.S. consumers. The benchmark index is on track to post its biggest weekly drop since early April. Preliminary data from Eurostat released on Friday showed that the Eurozone’s annual inflation rate held steady at the European Central Bank’s target in July, reinforcing the argument for policymakers to keep their key interest rate unchanged next month. Separately, a survey showed that Eurozone manufacturing edged closer to stabilization in July, as factory activity shrank at the slowest rate in three years, despite a decline in new orders and a moderation in output growth. Meanwhile, Switzerland was among the countries most affected by the latest round of tariff announcements as it now faces a 39% tariff on its exports to the U.S. The country’s federal council stated it remained committed to pursuing a negotiated solution with the U.S. In corporate news, Davide Campari-Milano NV (CPR.M.DX) climbed over +8% after reporting a higher Q2 operating profit.
Eurozone’s Manufacturing PMI, Eurozone’s CPI (preliminary), and Eurozone’s Core CPI (preliminary) data were released today.
Eurozone’s July Manufacturing PMI came in at 49.8, in line with expectations.
Eurozone’s July CPI rose +2.0% y/y, stronger than expectations of +1.9% y/y.
Eurozone’s July Core CPI rose +2.3% y/y, in line with expectations.
Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.37%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.66%.
China’s Shanghai Composite Index closed lower today as weak economic data from the country and concerns over global trade following U.S. President Donald Trump’s new tariffs weighed on sentiment. The benchmark index notched its first weekly loss in six weeks. A private sector survey released on Friday showed that China’s manufacturing activity unexpectedly slipped back into contractionary territory in July, as weakening new business growth prompted factories to cut back production. The reading, coupled with Thursday’s official survey, signals weak growth momentum at the start of the third quarter, following solid growth in the first half of the year. Chinese leaders at the much-anticipated Politburo meeting signaled on Wednesday that they would hold off on introducing major stimulus for now, but vowed to more effectively implement existing pro-growth measures. Meanwhile, U.S. President Donald Trump announced higher tariffs on dozens of trading partners. ANZ economists said in a note on Friday that “the U.S. deals with other economies will also affect China’s trade outlook.” Investor focus is now on whether the U.S.-China tariff truce will be extended after U.S. and Chinese officials wrapped up their latest round of trade talks in Stockholm earlier this week, with U.S. President Donald Trump set to make the final decision. U.S. Treasury Secretary Scott Bessent said on Thursday that the U.S. sees the framework of a trade deal with China taking shape, but it is “not 100% done.” In corporate news, Sinopec slumped over -5% after the nation’s largest oil refiner projected a 40% to 44% drop in first-half profit.
The Chinese July Caixin Manufacturing PMI came in at 49.5, weaker than expectations of 50.2.
Japan’s Nikkei 225 Stock Index closed lower today, dragged down by weakness in the technology sector. Chip stocks led the declines on Friday, with Tokyo Electron plunging over -18% after the chip equipment maker reported disappointing Q1 results and cut its full-year guidance. Also, shortly before Asian markets opened, U.S. President Donald Trump announced new tariff rates on dozens of trading partners, further dampening sentiment. In addition, investors digested weak economic data. A private sector survey released on Friday showed that Japan’s manufacturing activity contracted in July after stabilizing in the prior month, as subdued demand dragged production back into contraction. However, the majority of the survey data was gathered prior to last week’s announcement of the U.S.-Japan trade deal. As the trade agreement with Washington takes effect, “it will be important to see if this will translate into greater client confidence and improved sales in the months ahead,” said Annabel Fiddes, economics associate director at S&P Global Market Intelligence. Japan’s top trade negotiator, Ryosei Akazawa, said on Friday that the country will continue to push the U.S. to implement the agreed reduction in automobile and auto parts tariffs to 15% from 25%. Meanwhile, the benchmark index ended the week lower. In other news, the Kyodo news agency reported on Friday that a Japanese labor ministry panel plans to propose a roughly 6% increase in the national average minimum wage for this fiscal year, marking the largest such rise since at least 2002. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +3.74% to 23.29.
The Japanese July au Jibun Bank Manufacturing PMI stood at 48.9, stronger than expectations of 48.8.
The Japanese June Unemployment Rate was 2.5%, in line with expectations.
Pre-Market U.S. Stock Movers
Amazon.com (AMZN) slumped over -7% in pre-market trading after the tech and online retailing giant projected weaker-than-expected Q3 operating income.
Coinbase Global (COIN) plunged over -10% in pre-market trading after the cryptocurrency exchange reported weaker-than-expected Q2 results and provided weak Q3 subscription and services revenue guidance.
Apple (AAPL) rose more than +1% in pre-market trading after the iPhone maker posted its fastest quarterly revenue growth in more than three years, easily beating analysts’ estimates.
Reddit (RDDT) surged over +16% in pre-market trading after the social media company posted upbeat Q2 results and issued above-consensus Q3 revenue guidance.
First Solar (FSLR) gained more than +2% in pre-market trading after reporting better-than-expected Q2 results and raising its full-year revenue guidance.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - August 1st
Exxon Mobil (XOM), Chevron (CVX), Enbridge (ENB), Colgate-Palmolive (CL), Ares Management (ARES), Mitsui & Company (MITSY), Regeneron Pharma (REGN), WW Grainger (GWW), Dominion Energy (D), Imperial Oil (IMO), Kimberly-Clark (KMB), Cboe Global (CBOE), TELUS (TU), Fortis Inc (FTS), Church&Dwight (CHD), T Rowe (TROW), LyondellBasell Industries (LYB), Brookfield Renewable (BEP), nVent Electric (NVT), Franklin Resources (BEN), RBC Bearings (RBC), Magna Intl (MGA), EchoStar (SATS), Avantor (AVTR), Fluor (FLR), Ingredion (INGR), Oshkosh (OSK), IES Holdings (IESC), Piper Sandler (PIPR), Brookfield Business (BBU), Brightspring Health Services (BTSG), TransAlta Corp (TAC), Cinemark (CNK), Avient Corp (AVNT), Newell Brands (NWL), Arbor (ABR), Insperity (NSP), Patria Investments (PAX), WisdomTree (WT), Perella Weinberg Partners (PWP), Xenia Hotels & Resorts Inc (XHR), Dorian LPG Ltd (LPG), Interface (TILE), TELUS International (TIXT), Iradimed Co (IRMD), AdvanSix (ASIX), Fulgent Genetics (FLGT), Marcus (MCS), Butterfly Network (BFLY), Airsculpt Technologies (AIRS), Johnson Outdoors (JOUT), Ocugen (OCGN), AG Mortgage Investment (MITT), Escalade (ESCA).
