TL;DR

Stocks fell on weak jobs data and new Trump tariffs; Fed vacancy, rate cut odds, and volatility rose.

Highlights

• Fed Governor Adriana Kugler resigned early, giving President Trump an immediate FOMC nomination; 10-year Treasury yield dropped 14.6 bps to 4.214%1.
• U.S. stocks posted their sharpest losses since April: S&P 500 -1.6%, Dow -1.23%, Nasdaq -2.24%2.
• July nonfarm payrolls missed (73,000 vs. 104,000 est.), with downward revisions and unemployment rising to 4.2%2.
• Trump signed new tariffs (10–50%) on imports from non-trade-agreement countries (Canada, Brazil, India, Taiwan), effective August 72.
• Fed-funds futures now price an 80% chance of a September rate cut; 2-year Treasury yield fell 26 bps to 3.7%2.
• Amazon dropped 8% after cloud growth missed expectations, leading tech sector declines2.
• Gold rose nearly 2% to $3,450/oz; VIX climbed above 20 as risk aversion increased2.
• Trump accused the Bureau of Labor Statistics of “rigging” jobs data, adding political pressure to economic reporting8.
• Trump signaled willingness to negotiate tariffs with Brazil’s Lula, but diplomatic tensions remain3.
• U.S. federal judges blocked Trump administration efforts to expand fast-track deportations and roll back TPS protections6.
• Supreme Court signaled potential review of Voting Rights Act Section 2, raising redistricting uncertainty7.
• Walmart de México CEO resigned after weak Q2 profit; Chile’s Barrientos named interim chief5.

Commentary

Friday’s session was marked by a convergence of weak macro data and new policy shocks, driving a broad risk-off move in U.S. markets. The disappointing July jobs report, with a significant miss on payrolls and downward revisions, fueled concerns over labor market momentum2. This, combined with a late-session announcement of broad new tariffs on imports from major trading partners, sent equities sharply lower and triggered a flight to safety in Treasuries and gold 2. The S&P 500 , Dow , and Nasdaq all closed at multi-week lows, with tech stocks particularly hard-hit after Amazon’s earnings miss2.

Bond markets responded decisively to the economic and policy signals. The 2-year and 10-year Treasury yields fell sharply as traders priced in an 80% probability of a September Fed rate cut2. The abrupt resignation of Fed Governor Kugler, allowing Trump to nominate a new FOMC member, added to the uncertainty around future monetary policy direction, increasing the risk of a more politicized Fed in the coming months1.

The tariff announcement reignited global trade tensions, with immediate implications for supply chains and sectors exposed to international trade2. While Trump signaled openness to talks with Brazil, the market remains wary of further escalation and potential retaliation3. Defensive assets outperformed, with gold up nearly 2% and the VIX moving above 20, reflecting heightened risk aversion2.

Political and legal developments added further complexity. Trump’s public accusations against the Bureau of Labor Statistics could undermine confidence in official data, complicating the Fed’s policy calculus8. Meanwhile, federal court rulings blocked key parts of the administration’s immigration agenda6, and the Supreme Court’s move to review Section 2 of the Voting Rights Act introduces new uncertainty ahead of the 2026 midterms7.

Traders should monitor follow-through in risk assets, especially tech and exporters sensitive to tariffs, and watch for any signals on Fed nominations or trade negotiations. Rate expectations and volatility will likely remain elevated into next week.