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Tariffs and Weak Jobs Data Trigger Global Market Selloff
1 Aug
Summary
- Weak U.S. job growth and new tariffs spark global market plunge
- Dollar index and bond yields tumble, Fed rate cut expected
- Copper prices plunge 24% in worst week since 1988
On August 1, 2025, global markets were sent reeling by a combination of disappointing U.S. employment data and the latest round of tariffs imposed by the U.S. government. The U.S. jobs report for July shattered the optimism that had been building around the economy, with weak job growth triggering a massive selloff in stocks and the dollar.
The S&P 500 slid 1.6%, its biggest decline since May, while the Nasdaq tumbled 2.2%. The dollar index snapped a six-day winning streak, plunging more than 1% in its biggest fall since April. Bond yields also tumbled, with the 2-year yield dropping 26 basis points, the largest decline in a year. Commodity prices were also hit hard, with crude oil futures falling nearly 3% and copper prices plunging 24% in their worst week since futures contracts launched in 1988.
Investors were also caught off guard by the U.S. government's decision to impose new tariffs ranging from 10% to 41% on 69 trading partners, further escalating trade tensions. This move is expected to push the U.S. effective tariff rate closer to 20%, nearly 10 times higher than at the end of last year.
The combination of weak economic data and heightened trade uncertainty has shaken the foundations that had been supporting the market's record highs earlier in the week. With the VIX index back above 20 for the first time since April, the road ahead is likely to be choppy for global markets.
