US OPEN: Tariffs and weak NFP ignite broad selloff (01.08.2025)

Wall Street takes a big step back on Friday as both tariffs effective date and jobs data continue to spoil the mood. Russell 2000 dips the most (US2000: -2%), followed by Nasdaq (US100: -1.5%) sliding despite Apple and Amazon beating market expectations with their Q2 financial reports. S&P 500 and Dow Jones are also in the red (US500: -1.4%; US30: -1.25%).

Today’s Nonfarm Payrolls came in substantially below expectations, scarring Fed’s optimism about the health of the US labour market. Although the economy added 73 thousand jobs, the reading missed the consensus of 106 thousand and high expectations set by surprisingly strong ADP reading.

What baffles markets even more, were immense downward revisions of June and May readings, totalling nearly 260 thousand. This may indicate that labour market strength has been misperceived, albeit the unemployment did not deliver any negative surprise (4.2%, forecast 4.2%, previously 4.1%). Nevertheless, the implied rate cut probability for September rose from 50% to 70% after the data was released. 

Amid S&P 500 sectors, Consumer Discretionary firms and Financials take a largest hit, as traders are pricing in a weaker-than-expected labour market and sooner-than-expected rate cuts. Only Consumer Staples buck the broad market selloff. 

Source: Bloomberg Finance LP

US100 (H1)

Tech-heavy Nasdaq rebounded slightly from the support around 22,800 points, although the index is still down 3.5% from its recent peak. The buyers are struggling to bring the index back above the psychological level of 23,000 points, with price remaining well below 100-period exponential moving average (EMA100, dark purple). RSI is also stuck in the oversold area.

Source: xStation5

Company news:

• Amazon (AMZN.US) shares are down 7% after issuing a wide Q3 profit outlook and underwhelming AWS growth. While Q2 revenue beat expectations, AWS trailed rivals’ AI-driven surges. Record capex and rising costs raised concerns about ROI on AI spending. CEO Andy Jassy defended AWS’s leadership, citing early-stage AI dynamics and long-term infrastructure constraints.

• Apple (AAPL.US) is down 1.6% despite premarket optimism after reporting its strongest revenue growth in three years, with Q3 sales up 9.6% to $94B, beating estimates. iPhone and China demand drove the gains. Services and Macs outperformed, while wearables slumped. CEO Tim Cook flagged ongoing AI investments and potential acquisitions, though Apple still lags rivals in generative AI.

• DXC Technology (DXC.US) falls 7.9% despite beating Q1 estimates and  its FY26 outlook. Revenue hit $3.16B, with strong bookings and improved execution boosting confidence. Despite ongoing headwinds in outsourcing, DXC reaffirmed margin targets and leaned into GenAI. Analysts noted solid pipeline momentum under new leadership and AI integration across its services.

• Eli Lilly (LLY.US) shares are up 2.3% on news that Medicare and Medicaid may pilot weight-loss drug coverage, including Zepbound. The proposed plans, starting in 2026–2027, could expand access for millions. While not final, the move signals a policy shift and would benefit drugmakers like Lilly and Novo Nordisk amid rising obesity treatment demand.

• Moderna (MRNA.US) shares plummet 8.7% after the comapny narrowed its 2025 revenue forecast to $1.5–$2.2 billion, citing UK delivery delays. Capital expenditure was cut to $300 million. Q2 revenue fell 41% to $142 million, but beat estimates. Operating loss improved year-over-year, while lower R&D and SG&A spending helped offset cost pressures.