Stock markets across North America and Europe plunged on Friday following U.S. President Donald Trump’s sweeping new tariffs and a dismal U.S. jobs report, triggering the worst trading day on Wall Street since May.
The S&P 500 dropped 1.6 percent, marking its steepest single-day decline in over two months and a 2.4 percent weekly loss. The Nasdaq Composite sank 2.2 percent, while the Dow Jones Industrial Average slipped 1.2 percent. In Canada, the S&P/TSX Composite Index fell nearly one percent, reflecting the broader market gloom.
The selloff followed two major blows to investor confidence: a steep drop in U.S. job growth and Trump’s surprise tariff hike on dozens of countries, including Canada. Employers in the U.S. added only 73,000 jobs in July, far below expectations, with previous months’ numbers revised downward by 258,000. Trump’s abrupt firing of the U.S. labour statistics commissioner after dismissing the jobs report as “rigged” added to the market’s unease.
Trump also delayed the implementation of new tariffs until August 7, adding further uncertainty to global trade. Canadian Prime Minister Mark Carney called the 35 percent tariff on Canadian goods “disappointing,” reinforcing concerns about long-term impacts on Canada-U.S. trade.
The market turmoil is pressuring the U.S. Federal Reserve to act, with investors now predicting an 87 percent chance of an interest rate cut in September, up sharply from 40 percent the day before. The yield on the 10-year Treasury dropped to 4.2 percent, while the two-year note fell to 3.7 percent—significant shifts signaling mounting investor expectations for monetary easing.
Major corporations are already feeling the strain. Amazon plunged 8.3 percent despite a strong earnings report, and Apple fell 2.5 percent after warning of a $1.1 billion hit this quarter due to tariffs. ExxonMobil also declined as oil prices softened.
Global markets mirrored the selloff. Germany’s DAX dropped 2.7 percent, France’s CAC 40 fell 2.9 percent, and South Korea’s Kospi plummeted 3.9 percent, reflecting widespread concerns over a deepening global economic slowdown triggered by protectionist trade policies and weakening growth.
