Stocks retreated at the start of trade Friday, after the July jobs report showed healthy but slowing job growth, extending a selloff for equities triggered the previous session by President Donald Trump’s announcement of additional tariffs on goods imported from China.
How are the major benchmarks performing?
The Dow Jones Industrial Average DJIA, -0.73% fell 54 points, or 0.2%, to 26,536, while the S&P 500 SPX, -0.86% declined 10 points, or 0.3%, at 2,943. The Nasdaq Composite Index COMP, -1.35% fell 58 points, or 0.7%, to 8,052.
On Thursday, the Dow ended 280.85 points lower at 26,583.42, a loss of 1.1% and a swing of nearly 600 points from its session high ahead of the tariff news. The S&P 500 fell 26.82 points, or 0.9%, to 2,953.56, while the Nasdaq Composite shed 64.30 points, or 0.8%, to finish at 8,111.12.
Read: New Trump tariffs threaten U.S. consumer, spelling wider trouble for stocks, analysts say
What’s driving the market?
The U.S. economy created 164,000 jobs in July, the Labor Department said Friday, above economists expectations of 171,000, according to a MarketWatch poll. The unemployment rate held steady at 3.7%, above expectations of 3.6% as more workers entered the job force.
Average hourly earnings rose 3.2% year-over-year a slight uptick from the 3.1% rate in June.
“Overall I think it’s a good report, it’s coming in right where we expected,” said JJ Kinahan, chief market strategist at TD Ameritrade, in an interview.
Job growth was robust across most sectors, though the report did reflect the ongoing weakness in the manufacturing sector. “The rate of jobs created in manufacturing has slowed quite a bit from 2018,” he added.
On the positive side of the ledger, wage growth rose in June to 3.2% year-over-year. “If you’re the Fed and you’re looking for inflationary pressure, that’s a nice thing to see,” said Kinahan.
Early Thursday afternoon, in a series of tweets, Trump announced that the U.S. would impose 10% tariffs on the remaining $300 billion of imported Chinese goods and products not currently facing levies, catching investors by surprise after both sides earlier this week described trade talks as constructive.
“The negative mood across markets suggests that investors are jittery over sizzling trade tensions between the world’s two largest economies, sabotaging the already fragile global growth outlook,” said Lukman Otunuga, senior research analyst at FXTM, in a note.
Need To Know: Tariffs are rising, the Fed didn’t calm markets — so stay bullish, of course
Stocks gave up gains, while the U.S. dollar weakened, Treasury yields fell sharply and oil futures plunged following the announcement on Thursday.
Read: Why Trump’s tariff tweet sparked market mayhem
Analysts said the additional import tariffs would exacerbate a trend of declining business investment that could spread from the industrial sector to companies supplying consumer goods as well.
Trump, meanwhile, was expected to announce a deal to allow the U.S. to export more beef to the European Union, Bloomberg News reported.
Investors will also be watching for data on consumer sentiment and factory orders, both due at 10 a.m. Eastern Time.
See: The economy has problems, but the labor market isn’t one of them: U.S. likely added 171,000 jobs in July
Which stocks are in focus?
Apple Inc. AAPL, -2.23% stock is following Thursday’s 2.2% decline with a 0.9% drop Friday, after the import tariff announcement, which Wedbush analyst Dan Ives estimated could lower fiscal 2020 earnings by 4% if Apple absorbs the price increases, or cut iPhone demand by 6 million to 8 million united if Apple passes on the costs to consumers.
Another busy week of corporate earnings is coming to a close on Friday. Shares of Dow component Exxon Mobil Corp. XOM, -1.28% rose 0.8% early Friday, after the energy giant reported second-quarter earnings that fell less than Wall Street had expected. Revenue also fell 6% year-over-year.
Fellow Dow constituent Chevron Corp. CVX, -2.06% reported second-quarter profit that beat Wall Street expectations, while revenue growth came in below. Shares rose 0.6%
Shares of Newell Brands Inc. NWL, +14.00% were up 0.7%, after it announced second-quarter profit that rose more than expected, while raising its outlook for the full-year 2019.
Burger King parent Restaurant Brands International Inc. QSR, +4.78% on Friday reported second-quarter profit and revenue that topped expectations. Shares rose 0.3% Friday.
How are other markets trading?
The yield on the 10-year U.S. Treasury ticked lower to 1.885%, extending their Thursday fall which left yields at their lowest level in nearly 3 years.
In commodities markets, the price of oil rose 3.1% to just more than $55 per barrel, while gold prices also rose, 1%, to about $1,435 per ounce.
Asian and European stocks followed U.S. equities lower overnight Thursday. Japan’s Nikkei 225 Index NIK, -2.11% and Hong Kong’s Hang Seng Index HSI, -2.35% HSI, -2.35% fell more than 2%. The pan-European Stoxx 600 SXXP, -2.35% was off 1.6%.