Struggling US stock markets: a weak labor market, Amazon's plummet, and Fed unrest burden the Dow and Nasdaq.
The U.S. job market experienced a setback in July 2025, with only 73,000 jobs added, significantly below the expected 104,000. This unexpected weakness was primarily due to much lower job growth than initially reported for May and June, with significant downward revisions that reduced prior job gains by 258,000. As a result, the unemployment rate rose slightly to 4.2% from 4.1%.
Contributing factors to this labor market slowdown include tighter immigration enforcement, leading to fewer workers available, and a significant increase in long-term unemployed individuals, rising by 179,000 in July. Economist Thomas Gitzel of the VP Bank stated that trade disputes are leaving clear brake marks on the U.S. job market.
While the sources do not explicitly link tariffs or the Federal Reserve governor's resignation directly to the weak jobs market or its impact on the stock market, the weak labor data itself is seen as a warning sign for the U.S. economy. This potential economic weakness and the resulting shifts in Federal Reserve policy could indirectly affect financial markets, causing the Dow Jones Industrial Average to fall by 1.23 percent and reaching its lowest level since June. The Nasdaq 100 lost 1.96 percent, and the S&P-500 index dropped 1.60 percent.
In other economic news, Amazon's quarterly results were poorly received on U.S. exchanges, with shares falling by 8.3 percent. Analysts criticized the weak performance of Amazon's cloud computing platform AWS. Meanwhile, Moderna's shares fell by 6.6 percent due to a slight adjustment in its revenue forecast for the current fiscal year. Coinbase's shares plummeted by 16.7 percent due to unexpectedly low revenue for the second quarter.
On a positive note, Apple received praise from analysts, but shares fell by 2.5 percent due to the gloomy mood of investors. However, Reddit's shares soared by 17.5 percent, reporting its most profitable quarter to date and providing an unexpectedly high revenue outlook for the third quarter.
As for the Federal Reserve, Adriana Kugler, whose term was originally set to end in January of next year, resigned prematurely, effective August 8. The central bank is reportedly under strong pressure from U.S. President Donald Trump to cut interest rates. It remains unclear who will succeed the current Fed chair, Jerome Powell, whose term ends in May 2026.
In conclusion, the weak jobs numbers are mainly due to labor supply constraints, notably immigration policy changes and long-term unemployment increases, rather than tariffs or Fed-related issues directly discussed in the sources. The impact on the stock market would likely stem from investors reacting to the unexpected economic weakness and potential shifts in Federal Reserve policy based on these employment trends.
- What could be the potential impact on the stock market due to the weak jobs numbers? The unexpected economic weakness and the resulting shifts in Federal Reserve policy could indirectly affect financial markets, causing a potential drop in indices such as the Dow Jones Industrial Average, Nasdaq 100, and S&P-500.
- In the realm of finance and investing, investors might consider the stock-market trends wary of the weak labor data, as they might react to the potential economic slowdown and adjust their strategies accordingly, possibly focusing more on sectors less sensitive to economic cycles or seeking opportunities in companies that have shown resilience, such as Reddit.
