Wall St sees worst session since May on US eco jitters

Wall Street traders drove stocks towards their worst session since May, as weak jobs and manufacturing data revived concerns about the economy, a day after Trump unveiled sweeping tariffs.

Bond yields sank on bets that the Fed will cut rates soon. The S& fell 1.2%, with Amazon leading losses on an underwhelming profit outlook. Short-term yields headed toward their biggest plunge since Aug 2024. Money markets fully priced in two rate cuts in 2025, with an 80% chance of a reduction in Sept. The dollar sank.Job growth cooled sharply over the past three months and the unemployment rate rose. Payrolls increased 73,000 in July after the prior two months were revised down by nearly 260,000.

In the last three months, employment growth has averaged a paltry 35,000 - the worst since the pandemic."What had looked like a Teflon labour market showed some scratches this morning," said Ellen Zentner at Morgan Stanley Wealth Management. "A Fed that still appeared hesitant to lower rates may see a clearer path to a Sept cut, especially if data over the next month confirms the trend."A separate report showed US factory activity contracted in July at the fastest pace in nine months, dragged down by a faster decline in employment as orders continued to shrink.The twin shocks - a slew of new tariffs that boosted the average US rate on goods from across the world and evidence of a cooling labor market - sent investors scrambling to reassess the economic outlook.