Stock markets drop as Trump unleashes new round of global tariffs

Stock markets fell sharply on Friday, as U.S. unemployment rose and President Donald Trump unveiled steep tariffs on a wide range of countries.

Trump's latest tariffs, announced late Thursday, are reigniting concerns about how these import taxes would impact the U.S. and the global economies.

On Friday morning, a weaker-than-expected jobs report amplified investors' fears about the consequences: Employers created only 73,000 jobs in July, fewer than the around 100,000 jobs economists had expected. The unemployment rate ticked up to 4.2%.

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The Dow Jones Industrial Average fell more than 550 points, or about 1.3%, in morning trading. The S&P 500, which tracks the largest U.S. companies, fell about 1.5%, and the tech-heavy Nasdaq dropped about 2%.

A busy week of economic data

The latest tariffs announcement and the weak jobs report come at the end of a busy economic news week. Investors have been parsing the Federal Reserve's decision to hold interest rates steady. They've also been watching the earnings reports of the largest U.S. companies, which have been updating investors on how tariffs are affecting their abilities to make money.

The broad sell-off on Friday marks an abrupt reversal from Wall Street's optimism this summer. Markets went into a tailspin in April when Trump first unveiled his tariffs, before he started pausing and softening some of those tax rates.

Since then, global investors have largely been shrugging off his updated plans. But on Friday, their worries came roaring back, amplified by the new evidence that these tariffs are affecting the jobs market.

The jobs weakness is likely to increase calls for the Federal Reserve to lower interest rates when it next meets in September. The central bank held rates steady earlier this week, out of concern that rising tariffs would put more upward pressure on prices.

"The cracks in the labor market have widened substantially and add further pressure on the Federal Reserve to lower interest rates," Nationwide Chief Economist Kathy Bostjancic wrote on Friday morning.
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