US Stocks Plunge on Friday Amid Weak July Jobs Data and New Trump Tariffs

• Why Did US Stocks Crash on Friday?
• How Did Bank Stocks Perform?
• What Happened in Europe?
• Will the Fed Cut Rates Soon?
• What Are Experts Saying?
• Key Takeaways for Investors
• FAQs

US stocks took a nosedive on Friday as disappointing July jobs data and fresh tariffs imposed by the TRUMP administration rattled investors. The Dow Jones Industrial Average dropped 640 points (1.4%), the S&P 500 fell 1.6%, and the Nasdaq Composite tumbled 2.1%. Bank stocks were hit hardest, with JPMorgan Chase sinking nearly 4%. Meanwhile, the dollar weakened, and bond yields slid as traders bet on a Fed rate cut. European markets also felt the heat, with the Stoxx 600 posting its worst day since April. Here’s a deep dive into what went wrong—and what it means for the markets.

Why Did US Stocks Crash on Friday?

The sell-off was triggered by a dismal July jobs report, which showed only 73,000 new jobs—far below economists’ expectations of 100,000. Even worse, previous months’ figures were revised downward, confirming a worrying trend of accelerating job cuts. Employers announced 62,075 layoffs in July alone, a 140% spike from last year. So far in 2025, companies have slashed 806,383 jobs—the highest January-July total since the pandemic year of 2020. Government layoffs led the pack (292,294), followed by tech (89,251) and retail (80,487).

How Did Bank Stocks Perform?

Bank stocks got hammered as traders feared a slowing economy WOULD curb loan growth. JPMorgan Chase plunged nearly 4%, while Bank of America and Wells Fargo each lost over 3%. Industrial giants like GE Aerospace and Caterpillar also dropped around 3% on weaker demand concerns. "The jobs numbers are a gut punch," said one BTCC analyst. "If credit tightens further, we could see more pain ahead."

What Happened in Europe?

Europe’s inflation data surprised slightly to the upside (2% vs. 1.9% expected), but markets ignored it. Instead, Trump’s new tariffs sparked a global rout. The Stoxx 600 sank 1.8%, with travel stocks down 2.7% and banks sliding 2.9%. The euro jumped 1% against the dollar, which has now lost over 7% this year. "Tariffs are the last thing fragile markets need," remarked a London-based trader.

Will the Fed Cut Rates Soon?

Before the jobs report, Fed Chair Jerome Powell had downplayed September rate cuts. But after the data dropped, CME’s FedWatch Tool showed a 75.5% chance of easing—up from 40% the day before. Cleveland Fed President Beth Hammack told Bloomberg TV: "We might see some labor market softening. If so, we should respond." Bond markets agreed—10-year Treasury yields fell to 4.25%, their lowest in nearly a month.

What Are Experts Saying?

Jim Cramer didn’t mince words: "We’ve got no job growth and stagnant wages. The Fed must cut now." Even Powell admitted the report was "disappointing" but insisted the labor market remains "solid." Meanwhile, Fed officials Christopher Waller and Michelle Bowman—already skeptical of holding rates—now have stronger ammunition to push for cuts.

Key Takeaways for Investors

1.Weak employment numbers crushed risk appetite.
2.Financials are most vulnerable to economic slowdowns.
3.Trade policies are back as a market wildcard.
4.Rate-cut odds surged post-report—watch for September moves.