U.S. Stocks May Come Under Pressure On New Tariffs, Weak Jobs Data

(RTTNews) - Following the downturn seen over the course of the previous session, stocks are likely to see continued weakness in early trading on Friday. The major index futures are currently pointing to a sharply lower open for the markets, with the S&P 500 down by 1.1 percent.

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.

Not long after the start of trading, 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. The consumer sentiment index is expected to be upwardly revised to 62.0 from the preliminary reading of 61.8.

Additionally, 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.

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.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index declined by 0.7 percent, while Hong Kong's Hang Seng Index slumped by 1.1 percent.

The major European markets have also moved to the downside on the day. While 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.

In commodities trading, 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.