Stocks Fall Amid US Tariff Announcement and Weak Jobs Data

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The FTSE 100 experienced a sharp decline on Friday following US President Donald Trump’s announcement of new tariffs on several trading partners, alongside disappointing US jobs data that raised concerns about the health of the US economy.

The FTSE 100 index closed down by 64.23 points, or 0.7%, settling at 9,068.58. Similarly, the FTSE 250 dropped 263.49 points, a 1.2% decrease, ending the day at 21,699.34. The AIM All-Share also saw a decline, losing 4.34 points, or 0.6%, to finish at 757.16. For the week, the FTSE 100 saw a slight drop of 0.6%, while the FTSE 250 and AIM All-Share fell 1.9% and 2.6% respectively.

The downturn followed a report from the Bureau of Labour Statistics (BLS) showing US nonfarm payrolls grew by only 73,000 in July.. This was well below the expected 110,000, according to consensus cited by FXStreet. June’s job growth was also revised down significantly, from 147,000 to 14,000. May’s figures were revised down from 144,000 to 19,000, adding to concerns about the state of the US labour market.

July’s numbers represented the weakest month for the US jobs market in more than four years, with the previous low recorded in December 2020, when 183,000 jobs were lost. The unemployment rate ticked up to 4.2% in July from 4.1% in June, in line with expectations.

Kathleen Brooks at XTB commented on the data, saying, “This was an unexpectedly weak report.” She noted that tariffs had not yet significantly affected the economy and expressed concern over early signs of weakening job growth. She added, “A new narrative about the US economy is emerging: one in which the labour market is rapidly softening, wage growth remains strong, which could squeeze corporate margins, and the economy appears to require interest rate cuts.”

As challenges mount, concerns are growing that a combination of trade barriers and weakening job growth could cause further instability, with possible effects on global markets and broader economic prospects.