Wall Street ended sharply lower and benchmark Treasury yields jumped on Friday (Feb 7) in the wake of a mixed US payrolls report, weak consumer sentiment data and revived trade war jitters.
All three major US stock indices finished steeply lower in a broad sell-off that accelerated after a report that US President Donald Trump will shortly announce new tariffs.
The indices all notched losses on the week.
The much-anticipated employment report showed the US added 143,000 jobs in January, 53.4 per cent fewer than December’s upwardly revised 307,000.
The report, distorted by annual benchmark revisions, along with California wildfires and unusually cold weather, also showed hotter-than-expected wage growth and a surprise dip in the unemployment rate, to 4 per cent from 4.1 per cent.
“It’s a mixed bag” of data to digest, said Rob Williams, chief investment strategist at Sage Advisory Services in Austin, Texas.
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“It was a miss on the headline, but the revisions over the last two months were positive, and hourly earnings were also up.”
A separate report from the University of Michigan showed consumer sentiment has darkened unexpectedly this month as inflation expectations spiked.
The major indices extended losses after Trump said he will announce a new round of reciprocal tariffs on many countries next week.
“Anytime you play a game of chicken which is very clearly what Trump is doing,” said Michael Green, chief strategist at Simplify Asset Management in Philadelphia, “What if somebody decides to go too far and we end up with a car crash?“
“Ultimately, what Trump is taking advantage of is a very unbalanced negotiation; at the end of the day, the customer is always right,” Green added. “And for the vast majority of the world, the US is the primary customer.”
Late on Thursday, Amazon reported disappointing growth in its cloud computing segment and lower-than-expected first quarter revenue and profit.
Similar disappointments from Microsoft and Alphabet earlier in the week fuelled suspicions the megacap tech and tech-adjacent stocks are losing momentum.
The Dow Jones Industrial Average fell 444.23 points, or 1 per cent, to 44,303.4, the S&P 500 fell 57.58 points, or 1 per cent, to 6,025.99 and the Nasdaq Composite fell 268.59 points, or 1.4 per cent, to 19,523.4. REUTERS
