TL;DR

U.S. jobs data disappoints, Trump fires BLS chief and imposes broad tariffs, risk assets sell off.

Highlights

• July U.S. nonfarm payrolls rose by 73,000, well below forecasts; prior months revised down by 258,000; unemployment rate increased to 4.2%2.
• President Trump fired BLS Commissioner McEntarfer after the weak jobs report, raising concerns about political interference in economic data1.
• Trump imposed new tariffs (10–41%) on imports from 70 countries, with Canada, Brazil, Switzerland, and India among those affected; Dow fell ~600 points3.
• U.S. 2-year Treasury yield dropped ~20bps to 3.76% as rate cut odds for September surged to 90%4.
• Cboe VIX rose above 20 for the first time since June, signaling higher volatility10.
• Fed officials Bostic and Hammack remain data-dependent, warn tariffs could lift inflation despite softening labor data618.
• Trump ordered two U.S. nuclear submarines to reposition near Russia, escalating geopolitical tensions5.
• U.S. sanctions disrupted Russian oil flows to India; Indian refiners increased U.S. and UAE crude purchases8.
• U.S. oil rig count dropped to a four-year low (410), reinforcing expectations for slower domestic supply growth9.
• Tesla ordered to pay $329 million in Autopilot crash verdict; shares down 2%11.
• OpenAI raised $8.3 billion at a $300 billion valuation; Vast Data in talks for $30 billion AI infrastructure round1213.
• U.S. crypto ETFs saw record $12.8 billion July inflows, led by Ethereum products, despite $805 million in crypto liquidations1617.

Commentary

U.S. equities closed sharply lower as a combination of weak labor data and aggressive new tariffs weighed on risk sentiment. The July payrolls miss and historic downward revisions signal a clear loss of labor market momentum, pushing the unemployment rate to 4.2%2. Markets responded with a swift repricing of Fed expectations: the 2-year Treasury yield dropped 20bps and futures now price a 90% chance of a September rate cut34. However, Fed officials remain cautious, highlighting tariff-driven inflation risks even as hiring slows618.

The abrupt firing of the BLS chief by President Trump following the jobs report has heightened concerns about the credibility of U.S. economic data1. This, combined with the announcement of broad tariffs on 70 countries, triggered a broad risk-off move—sending the Dow down 600 points, the S&P 500 and Nasdaq lower, and the VIX above 20310. Safe-haven flows supported Treasuries and weighed on the dollar 34.

Commodities and energy markets face cross-currents. U.S. oil supply growth looks set to slow with the rig count at a four-year low9, while U.S. sanctions are disrupting Russian oil flows to India and prompting shifts in global trade patterns8. Meanwhile, defense and aerospace could see selective interest after the U.S. moved nuclear submarines near Russia5, but broader geopolitical risk keeps traders defensive.

In tech, AI remains a focus as OpenAI’s $8.3 billion raise and Vast Data’s funding talks highlight continued investor demand1213. Crypto markets remain volatile, with heavy liquidations16 offset by record ETF inflows—especially into Ethereum —on the back of regulatory clarity and a weaker dollar 17.

Traders should monitor for any late-day Fed commentary, further political developments around economic data, and potential international responses to U.S. tariffs. Defensive positioning and volatility hedges remain in focus into the close.