Wall St tumbles after poor US jobs data; Sensex gains over 200 pts, Asian markets mixed

The Indian stock market indices snapped a losing streak on Monday (August 4) with the Sensex gaining more than 200 points and the Nifty moving above 24,600 even as shares in Asia showed mixed reactions after Wall Street had its worst day since May following the release of weak US jobs data.

Markets in Asia had already reacted on Friday (August 1) to US President Donald Trump's announcement of sweeping tariffs on imports from many US trading partners, posting moderate losses. The new import duties are set to take effect on Thursday.

Tokyo's Nikkei 225 index lost 1.6 per cent, bouncing back from bigger losses, to 40,134.97.

The Hang Seng in Hong Kong edged 0.2 per cent higher, to 24,589.21, while the Shanghai Composite index was nearly unchanged at 3,562.18.

In South Korea, the Kospi surged 0.7 per cent to 3,140.92.

Australia's S&P/ASX 200 shed 0.2 per cent to 8,643.00.

Weakening US economy

Investors' worries about a weakening US economy deepened after the latest report on job growth in the US showed employers added just 73,000 jobs in July. That is sharply lower than economists expected. The Labour Department also reported that revisions shaved a stunning 258,000 jobs off May and June payrolls.

“The labour market, once a pillar of resilience, is now looking more like a late-cycle casualty, as soft data begin to replace soft landings in market discourse,” Stephen Innes of SPI Asset Management said in a commentary.

Also Read: Trump tariff shocker leaves Indian stocks, exporters scrambling

US futures edged 0.3 per cent higher, however, early Monday (August 4).

On Friday, the S&P 500 fell 1.6 per cent, its biggest decline since May 21 and its fourth straight loss. It closed at 6,238.01, posting a 2.4 per cent loss for the week.

The Dow Jones Industrial Average fell 1.2 per cent to 43,588.58, while the Nasdaq composite fell 2.2 per cent to finish at 20,650.13.

Amazon, Apple shares fall

Internet retail giant Amazon fell 8.3 per cent, despite reporting encouraging profit and sales for its most recent quarter. Technology behemoth Apple fell 2.5 per cent after also beating Wall Street's profit and revenue forecasts. Both companies face tougher operating conditions because of tariffs, with Apple forecasting a $1.1 billion hit from the fees in the current quarter.

Also Read: Markets inch higher in early trade on fresh foreign fund inflows, rally in US stocks

Trump's decision to order the immediate firing of the head of the government agency that produces the monthly jobs figures raised concern over whether there might be interference in future data.

The surprisingly weak hiring numbers led investors to step up their expectations the Federal Reserve may cut interest rates in September.

Lower yield on US bonds

The yield on the 10-year Treasury fell to 4.21 per cent from 4.39 per cent just before the hiring report was released. That's a big move for the bond market. The yield on the two-year Treasury, which more closely tracks expectations for Fed actions, plunged to 3.68 per cent from 3.94 per cent just prior to the report's release.

The Fed has held rates steady since December. A cut in rates would give the job market and overall economy a boost, but it could also risk fuelling inflation, which is hovering stubbornly above the central bank's 2 per cent target.

Also Read: Sensex and Nifty surge in early trade after RBI's rate cut

An update on Thursday for the Fed's preferred measure of inflation showed that prices ticked higher in June, rising to 2.6 per cent from 2.4 per cent in May.

The Fed held rates steady again at its most recent meeting this week. Fed Chair Jerome Powell has been pressured by Trump to cut the benchmark rate, though that decision isn't his to make alone, but belongs to the 12 members of the Federal Open Market Committee.

Cloud of uncertainty

Businesses, investors, and the Fed have been operating under a cloud of uncertainty from Trump's tariff policy.

Companies have been warning investors that unpredictable policies, with some tariffs already in effect while others change or get extended, make it difficult to plan ahead. Walmart, Procter & Gamble, and many others also have warned about import taxes raising costs, eating into profits, and raising prices for consumers.

Also Read: US stocks drop, Asian markets sink amid uncertainty over Trump’s tariffs

In other dealings early Monday, US benchmark crude oil lost 18 cents to $67.15 per barrel. Brent crude, the international standard, fell 23 cents to $69.44 per barrel.

The US dollar rose to 147.80 Japanese yen from 147.26 yen. The euro weakened to $1.1577 from $1.1598.

(With agency inputs)