The shares her Wall Street On Friday (1.8.25), at the first August meeting, as investors evaluated clear signs of deceleration of the economy and President Donald Trump’s amended tariff policies.
The Dow Jones index fell by 542 points or 1.23%. The S&P 500 lost 1.6%, while Nasdaq fell 2.24%. Wall Street bank shares have fell sharply due to concerns that the slowdown of the economy could hurt the increase in loans. JPMorgan Chase’s shares dropped over 2%, while Bank of America and Wells Fargo fell more than 3% each. The shares of GE Aerospace and Caterpillar dropped by 1% and 3% respectively.
The July employment report showed that jobs outside the agricultural sector increased by 73,000, well below the forecasts of economists who participated in a Dow Jones poll and expecting an increase of 100,000. The numbers of previous months were revised significantly downward. The increase in positions in June was reduced to 14,000, from 147,000. The May measurement decreased to 19,000 from 125,000, suggesting that the labor market has long been weakened.
“What we are seeing is concern about growth at a time when market valuations have increased significantly,” said Thierry Wizman, a foreign exchange and interest rate strategic analyst at Macquarie Group. “It is also indicative of a ‘summer horror’ for growth, but it is combined with the idea that the ‘pigeons’ (that is, the in favor of loose monetary policy) in the Fed were ultimately right – which reinforces the view that the Fed was slow to act.”
The new figures have increased the chances that the US Federal Bank (FED) will reduce interest rates earlier than expected in order to support the economy – which has helped to reduce the losses in the shares somewhat. Investors now yield about 80% of interest rates in September, according to forecasts of CME’s future fulfillment contracts. It is a climate reversal since Wednesday, when the chances had fallen sharply following the statements of Fed President Jerome Powell, who stressed that the bank should wait and evaluate the impact of duties on inflation before reducing interest rates.