U.S. stocks are commencing August with a discernible lack of momentum, as major market futures indicate a modest downturn on Friday. This subdued opening sets the stage for a critical day, heavily influenced by anticipated economic data and ongoing geopolitical factors impacting investor sentiment.
A significant factor contributing to this cautious outlook is President Donald Trump’s recent announcement of more stringent Trump tariffs, slated to take effect on August 7. These new trade measures are poised to create a considerable pushback for risk sentiment, prompting traders to adopt a watchful stance.
Adding to the market’s complexity is the mixed reaction to Thursday’s “Big Tech Earnings” reports. While Apple demonstrated robust quarterly revenue growth, leading to a rise in its stock, Amazon’s less-than-stellar cloud revenue growth and cautious operating income guidance triggered a notable sell-off, highlighting investor selectivity.
Early Friday trading reflected this widespread apprehension, with the Nasdaq 100, S&P 500, Dow, and Russell 2000 futures all experiencing declines exceeding 0.35% as of 3:10 a.m. ET. These movements underscore a broader market sensitivity to both policy changes and corporate performance.
Thursday’s trading session saw stocks succumbing to prevalent concerns surrounding these tariffs and broader macroeconomic uncertainties. This overshadowed the initial optimism spurred by solid quarterly results from other technology giants like Meta and Microsoft, indicating a fragile market equilibrium.
Exchange-traded funds (ETFs) mirrored the overall market weakness. The Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100 Index, fell by 0.53%, while the SPDR S&P 500 ETF (SPY) slipped 0.38%. The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the iShares Russell 2000 ETF (IWM) experienced even sharper declines, plunging 0.77% and 0.98% respectively, reflecting the broad-based retreat in US Stocks.
A pivotal event looming for the market is the release of the July jobs report (non-farm payrolls data) by the Bureau of Labor Statistics, scheduled for 8:30 a.m. ET. Economists, on average, anticipate a moderation in job growth, with an expectation of 100,000 new jobs added, a slowdown from the previous month’s 147,000.
Beyond the primary jobs report, traders are also keenly observing other crucial economic data points. These include the final reading of the S&P’s July manufacturing purchasing managers’ index (PMI), the Institute for Supply Management’s manufacturing PMI, and the comprehensive University of Michigan’s consumer sentiment index, all providing further insights into economic health.
The day’s significant earnings reports are also on investors’ radar, with companies like CBOE Global Markets (CBOE), oil giants Exxon Mobil (XOM) and Chevron (CVX), Colgate-Palmolive (CL), Moderna (MRNA), and Regeneron Pharma (REGN) slated to release their results. Concurrently, crude oil and futures traded modestly lower, the 10-year Treasury note yield rebounded, and the dollar showed firmness against most major currencies, completing a complex market picture.
