Nasdaq 100: US Stocks Slide as Tariffs Hit Tech, VIX Spikes to Six-Week High

Wall Street Sinks as Tariffs and Weak Jobs Data Rattle Markets

U.S. equities tumbled Friday as sweeping tariffs on key trading partners and weaker payroll numbers rattled investor confidence.

The Dow Jones Industrial Average dropped 645.83 points, or 1.46%, to 43,485.15. The S&P 500 lost 1.8%, while the Nasdaq sank 2.43%, marking their worst single-day declines since April.

Did Tariffs Trigger Broad-Based Selling Across Sectors?

Hours before Friday’s market open, President Trump signed an executive order slapping new tariffs on imports from Canada, Brazil, India, and Taiwan. The decision sparked immediate concern about escalating trade tensions and potential retaliatory measures, pressuring risk assets across the board. Apple shed 2% after CEO Tim Cook warned the tariffs would add $1.1 billion in costs this quarter, despite the company offering a solid revenue forecast.

Nine of 11 S&P 500 sectors finished in the red, with consumer discretionary plunging 3.5%, weighed by an 8% drop in Amazon after its cloud division missed growth estimates. Technology and communication services followed closely, losing 1.9% and 1.45%, respectively. Financials declined 2%, dragged down by Coinbase, which plummeted 15.6% after reporting a sharp fall in adjusted profits.

How Did the Jobs Report Influence Rate Cut Bets?

The July payrolls report showed job growth slowing more than expected, with sharp downward revisions to May and June data. Although the unemployment rate held steady, traders increased bets on a September rate cut, with FedWatch pegging odds at 80%. Russell Investments noted that job creation has narrowed to a few sectors like healthcare, suggesting broader labor market softness.

The VIX surged to a near six-week high, rising 19.41 points, signaling elevated fear. Meanwhile, Trump renewed criticism of Fed Chair Jerome Powell, suggesting the board take control if Powell resists lowering rates—remarks unlikely to influence policy but adding to investor anxiety.

Can Reddit’s Outperformance Offer Relief in a Downbeat Tape?

While most mega caps struggled—Nvidia, Meta, Alphabet, and Tesla all closed lower—Reddit soared 21.9% after a strong earnings beat fueled by robust AI-driven ad revenue and rising user engagement. It was a rare bright spot in an otherwise risk-off session.

Market Outlook: Can the Fed and Tariff Developments Shift Sentiment?

Friday’s rout reversed gains earlier in the week tied to optimism over AI momentum and U.S.-EU trade progress. With fresh tariffs dampening sentiment and labor market softness fueling rate cut expectations, traders will focus on upcoming inflation data and Fed commentary.

Volatility remains elevated, and positioning may stay defensive unless clear signals emerge from the Federal Reserve or trade fronts.

More Information in our Economic Calendar.