New Tariffs, Weak Jobs Data May Weigh On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a notably lower open for the markets on Friday, with stocks likely to see continued weakness following the downturn seen over the course of the previous session.

Concerns about the economic impact of President Donald Trump's tariffs are likely to weigh on Wall Street, as the White House announced new tariff rates on dozens of countries.

The new tariffs range from just 10 percent to as high as 41 percent, and the White House said a 40 percent levy will be imposed on goods that have been transshipped to evade applicable duties.

"Investors have been caught off guard, having previously hoped Trump would kick the new tariff levels down the road pending further negotiations with foreign trade partners," said Russ Mould, investment director at AJ Bell.

He added, "Instead, we've got new rates galore and that means investors need to spend time understanding what that means for companies in their portfolio."

Negative sentiment may also be generated in reaction to a closely watched Labor Department report showing much weaker than expected job growth in the month of July.

The Labor Department said non-farm payroll employment rose by 73,000 jobs in July, while economists had expected employment to jump by 110,000 jobs.

The report also showed much larger than normal downward revisions to job growth in May and June, with employment in the two months increasing by a combined 258,000 fewer jobs than previously reported.

With the downward revisions, employment in May edged up by 19,000 jobs, while employment in June crept up by 14,000 jobs.

The Labor Department also said the unemployment rate inched up to 4.2 percent in July from 4.1 percent in June, with the uptick matching expectations.

A steep drop by shares of Amazon (AMZN) may also weigh on Wall Street, with the online retail giant plunging by 7.7 percent in pre-market trading after reporting better than expected second quarter results but providing disappointing operating income guidance for the current quarter.

After moving sharply higher early in the session, stocks gave back ground over the course of the trading day on Thursday. The major averages pulled back well off their best levels of the day and into negative territory.

The major averages finished the day just off their lows of the session. The Nasdaq edged down 7.23 points or less than a tenth of a percent to 21,122.45, the S&P 500 fell 23.51 points or 0.4 percent to 6,339.39 and the Dow slid 330.30 points or 0.7 percent to 44,140.98.

The early strength on Wall Street came following the release of upbeat earnings news from tech giants Meta Platforms (META) and Microsoft (MSFT).

Facebook parent Meta Platforms soared by 11.3 percent after the company reported better than expected second quarter results and provided upbeat third quarter revenue guidance.

Shares of Microsoft also surged by 4.0 percent after the software giant reported fiscal fourth quarter results that exceeded analyst estimates on both the top and bottom lines.

Buying interest waned shortly after the start of trading, however, potentially leading to some profit taking after the Nasdaq and the S&P 500 reached new record closing highs.

The subsequent pullback on Wall Street also came as traders kept an eye on the latest developments on the trade front ahead of President Donald Trump's tariff deadline on Friday.

During an interview on CNBC's "Squawk Box," Treasury Secretary Scott Bessent said he believes the U.S. and China "have the makings of a deal" and expressed confidence an agreement would be reached.

Trump announced a trade deal with South Korea in a post on Truth Social on Wednesday, with a 15 percent tariff to be imposed on South Korean goods.

Meanwhile, in a separate post, Trump announced a 90-day extension of the 25 percent blanket tariff on Mexican imports as well as a 25 percent tariff on cars and a 50 percent tariff on steel, aluminum and copper.

In U.S. economic news, a closely watched report released by the Commerce Department showed consumer prices in the U.S. increased in line with economist estimates in the month of June.

Semiconductor stocks came under substantial selling pressure over the course of the session, with the Philadelphia Semiconductor Index plunging by 3.1 percent after ending Wednesday's trading at its best closing level in a year.

Qualcomm (QCOM) helped lead the sector lower, plummeting by 7.7 percent despite reporting better than expected fiscal third quarter earnings.

Considerable weakness also emerged among pharmaceutical stocks, dragging the NYSE Arca Pharmaceutical Index down by 2.9 percent to a two-month closing low.

Healthcare, oil service and steel stocks also showed significant moves to the downside as the day progressed, while notable strength remained visible among software and computer hardware stocks.

Commodity, Currency Markets

Crude oil futures are inching up $0.03 to $69.29 a barrel after falling $0.74 to $69.26 barrel on Thursday. Meanwhile, after edging down $4.20 to $3,348.60 an ounce in the previous session, gold futures are climbing $21.90 to $3,370.50 an ounce.

On the currency front, the U.S. dollar is trading at 150.83 yen versus the 150.75 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1510 compared to yesterday's $1.1415.

Asia

Asian stocks fell on Friday as higher U.S. tariffs kicked in and a private survey showed Chinese manufacturing activity returned to contractionary territory in July as a result of softening new business growth.

Seoul markets led regional loses after the government proposed higher taxes on investors and companies in a bid to shore up revenue.

U.S. President Donald Trump on Thursday confirmed imports from most countries will face a minimum tariff rate of 10 percent, while imports from countries with trade surpluses with the U.S. face duties of 15 percent or higher.

The dollar was little changed in Asian trading after posting its best month of the year in July. Oil prices were steady following Trump's threats to impose 100 percent tariffs on countries importing oil from Russia.

Gold dipped below $3,300 per ounce ahead of the U.S. July jobs report due later in the day, with employment likely to moderate after a June increase. The jobless rate is seen ticking up to 4.2 percent.

China's Shanghai Composite Index dropped 0.4 percent to 3,559.95 on worrying signs about the economy's momentum in the period ahead. Hong Kong's Hang Seng Index slumped 1.1 percent to 24,507.81 on Fed rate jitters and soft Chinese data.

Japanese markets fell notably after mixed earnings from Apple and Amazon and concerns about continued investments by major tech players.

The Nikkei 225 Index gave up 0.7 percent to close at 40,799.60, while the broader Topix Index settled 0.2 percent higher at 2,948.65.

Chip-equipment maker Tokyo Electron plummeted 18 percent after slashing its profit forecast, saying it now sees a slower-than-expected recovery in demand from logic chipmakers.

Seoul stocks sank the most in nearly four months as the government's tax revision proposal overshadowed data showing stronger-than-expected export growth for July. The Kospi plunged 3.9 percent to close at 3,119.41, marking the largest daily loss since April 7.

Large-cap tech shares bore the brunt of the selling, with Samsung Electronics tumbling 3.5 percent and its chipmaking rival SK Hynix plummeting 5.7 percent.

Australian markets ended lower, with banks, tech and gold stocks taking a hit. The benchmark S&P/ASX 200 Index fell 0.9 percent to 8,662, extending losses from the previous session despite the country being spared a tariff increase under the new trade policy announced by Trump. The broader All Ordinaries Index closed 0.9 percent lower at 8,917.10.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index ended down 0.7 percent at 12,729.40.

Europe

European stocks have fallen sharply to hit three-week lows on Friday as investors assess the potential economic impact of fresh U.S. levies on dozens of countries, including a 39 percent rate on Switzerland.

Pharma stocks were under heavy selling pressure after U.S. President Donald Trump asked 17 major global pharmaceutical companies to lower drug prices in the U.S.

In economic news, flash data from Eurostat showed Eurozone inflation remained at the European Central Bank's 2 percent target last month, bucking expectations of a slight fall.

Eurozone manufacturing moved closer to stabilization in the month, with the HCOB Eurozone Manufacturing PMI coming in at 49.8, up from 49.5 in June.

Elsewhere, U.K. house prices increased 2.4 percent on a yearly basis in July following June's 2.1 percent increase, Nationwide Building Society said. Prices were expected to climb at a steady pace of 2.1 percent in July.

The French CAC 40 Index is down by 2.2 percent, the German DAX Index is down by 1.9 percent and the U.K.'s FTSE 100 Index is down by 0.6 percent.

Pharmaceutical stocks were down across the board, with GSK, AstraZeneca and Novo Nordisk falling 2-5 percent.

German pharmaceutical and biotechnology company Bayer rose 1.7 percent after raising its 2025 sales forecast.

Daimler Truck Holding slumped 5 percent. The owner of U.S. truck brand Freightliner trimmed its 2025 forecast, citing persisting market weakness in North America.

Software firm SAP dropped 2 percent after signing a deal to buy SmartRecruiters, a talent acquisition software provider.

Saint Gobain, a sustainable construction major, fell 4.3 percent in Paris as it posted a 3.4 percent year-over-year increase in first-half sales at constant currencies.

Life and health insurer Axa plunged 6 percent as first-half profit came in below estimates.

Utility Engie tumbled 3 percent on posting a 9.4 percent fall in half-year earnings.

Italian utility Enel declined nearly 2 percent after reporting a 1 percent year-on-year rise in its ordinary core profit in the first half.

British education company Pearson surged 4 percent after first-half underlying sales and adjusted operating profit topped forecasts.

British Airways owner IAG shed 1.5 percent despite reporting consensus-beating operating profit growth for the second quarter.

U.S. Economic News

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At 10 am ET, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of July. The manufacturing PMI is expected to inch up to 49.5 in July from 49.0 in June, but a reading below 50 would still indicate contraction.

The University of Michigan is also due to release its revised reading on consumer sentiment in the month of July at 10 am ET. The consumer sentiment index is expected to be upwardly revised to 62.0 from the preliminary reading of 61.8.

Also at 10 am ET, the Commerce Department is scheduled to release its report on construction spending in the month of June. Construction spending is expected to inch up by 0.1 percent in June after falling by 0.3 percent in May.