Summary
- Friday’s market roundup marks dismal mood amid downbeat U.S. employment data and Trump-linked trade fears.
- U.S. NFP surprisingly weakened, unemployment rate inched up but wage growth stays firmer, allowing Trump to criticize Powell.
- U.S. SEC’s launch of “Project Crypto” and the downbeat U.S. Dollar fail to revive cryptocurrencies.
- Bitcoin clings to a three-week low, gold rallies as the U.S. Dollar slumps on disappointing U.S. NFP data.
Wall Street tumbles on Friday amid market volatility and risk-off sentiments. Among the key catalysts, the U.S. monthly employment report and fears linked to U.S. President Donald Trump’s steep tariffs gained major attention. Also, Trump’s criticism of the Federal Reserve (Fed) Chairman Jerome Powell, especially following the U.S. central bank’s inaction and downbeat jobs report, added to the risk aversion.
President Trump’s new tariff hikes on Canada, Switzerland, and copper imports are taking center stage, overshadowing his push to reduce drug prices. He also agreed to a 90-day pause on tariffs for Mexico. Moreover, U.S. officials are growing more skeptical about the U.S.-China trade deal, especially after Beijing halted approvals for U.S. investments, which in turn adds to the market’s sour sentiment.
Meanwhile, upbeat results from Apple and Amazon failed to defend the Wall Street optimists as details of their earnings reports suggest fears of rising costs and the companies’ limited AI capabilities.
Amid these plays, the U.S. Dollar Index not only reverses from a two-month high to snap its six-day winning streak but also eyes the biggest daily slump since early April.
This allowed the spot Gold (XAU/USD) to extend the previous day’s rebound from a month’s low and brace for the biggest daily jump in two months, up 2.10% intraday to $3,360 at the latest. However, Bitcoin (BTC/USD) reverses its initial rebound from the three-week low while printing a five-day losing streak around $113,800 as we write.
The benchmark U.S. equity indexes print more than 1.0% intraday loss during the initial trading hours while the U.S. Treasury bond yields slump. Additionally, WTI crude oil extends the previous day’s retreat from a five-week-high down 2.80% intraday near $67.50 at the latest.
The Latest Catalysts
After a slew of upbeat prints for the top-tier U.S. economics and the Federal Reserve’s (Fed) hawkish halt, the U.S. Bureau of Labor Statistics (BLS) disappointed markets with its July employment report.
The headline Nonfarm Payrolls (NFP) marked a surprise 73K figure versus 110K expected, while the prior readings also got revised from 147K to 14K. This pushed the Unemployment Rate higher to 4.2%, matching market forecasts, versus 4.1% prior. On a slightly positive note, the Average Hourly Earnings (also known as the wage growth) improved to 3.9% YoY compared to 3.8% market forecasts and prior (revised). Additionally, the ISM Manufacturing PMI for July also dropped beneath the 49.5 market consensus and 49.0 prior readings to 48.00 while exerting additional downside pressure on the US Dollar.
Elsewhere, U.S. President Donald Trump surprised markets late Thursday while announcing 35% tariffs on Canada and 39% on Switzerland. The Republican Leader’s 50% tariffs on raw copper imports and push for lower drug prices also gained attention. On a different but familiar note, Trump criticized Powell on his own Truth Social after the latest U.S. jobs report.
Meanwhile, Trump’s readiness to punish nations importing from Russia by higher tariffs, in an attempt to push Moscow towards a peace deal with Ukraine in 10 days, also weighs on the sentiment. On the same line are Trump’s warnings to Iran and North Korea, as well as the tougher stand towards China despite on-going trade negotiations.
Equities and Cryptocurrencies Decline
U.S. equity benchmarks opened lower on Friday, extending Thursday’s late-session losses, as investors reacted to disappointing jobs data and growing anxiety over steep U.S. tariffs set to take effect across nearly 50 countries. Also challenging the risk appetite were mixed clues from Apple and Amazon during their latest earnings results, published during Thursday’s after-market hours.
On Thursday, the U.S. stocks closed with modest losses, despite strong earnings from Apple and Amazon. The details suggest fears of rising costs and the companies’ limited AI capabilities, which in turn join broader risk aversion to weigh on the Wall Street benchmark early Friday.
Also read: Apple and Amazon Ride AI Wave as Tech Earnings Outperform Expectations
Elsewhere, Bitcoin (BTC/USD) prints a five-day losing streak and the Ethererum (ETH/USD) extends the previous day’s losses amid broadly firmer US Dollar. In doing so, the cryptocurrencies ignore the latest news from the U.S. Securities and Exchange Commission (SEC). Recently, the U.S. SEC Chairman Paul S. Atkins announced Project Crypto, a Commission-wide initiative to modernize securities regulation and transition U.S. markets to an on-chain infrastructure, per the Traders Magazine report.
Also read: Bitcoin Price Analysis: Rising Wedge Puts BTC on Bear’s Radar; Watch $110K and These Catalysts!
- Gold eyes the biggest daily gain since early June, up 1.6% intraday to $3,341 by the press time.
- Bitcoin (BTC/USD) remains under pressure at a three-week low, but lacks downside momentum near $115K at the latest.
- Ethereum (ETH/USD) prints two-day losing streak, losing 1.80% intraday near $3,631 as we write.
- U.S. Dollar Index (DXY) slumps 1.18%, reversing from multi-week high and stalling six-day winning streak by falling to 98.85.
- Wall Street Prints Red: Dow Jones, S&P 500 and Nasdaq all three report more than 1.0% intraday loss each during the initial hour, tracking downbeat performance of stocks in Asia and Europe.
- WTI Crude Oil extends fall from a five-week high, down 2.80% intraday to $67.30 as we write.
Risk catalysts eyed…
With most of this week’s key data and events out and acted upon, market players could concentrate on the key risk catalysts to determine near-term momentum.
Notably, rising U.S. tariff fears and an escalation in the tension between the U.S. and Russia, as well as geopolitical fears surrounding North Korea, China and Iran, will gain major attention. Additionally, a likely increased political pressure on the Federal Reserve, following its decision to hold rates steady and the recent disappointing U.S. employment data, might also weigh on the sentiment.
These catalysts might weigh on the U.S. Dollar but can favor Gold to pare its weekly losses. However, cryptocurrencies like the Bitcoin (BTC/USD) and Ethereum (ETH/USD) could continue their weaker performances amid a likely market consolidation following July’s stellar run-up and growing discomfort among traders following the broadly firmer U.S. Dollar, despite today’s retreat.
Elsewhere, the U.S. equity benchmarks remain vulnerable to further declines as record highs and market fears make profit-booking easy.
Meanwhile, US Treasury bond yields could weaken further and crude oil might witness further downside amid demand fears linked to the U.S. tariffs.
