U.S. stock indices plunged following the release of weaker-than-expected employment figures, heightening concerns about the state of the economy amid impending tariff hikes on key U.S. trade partners, AFP reported.

Major Wall Street indexes dropped by 1.5% or more at the start of trading after the Labor Department announced that the U.S. economy added just 73,000 new jobs in July. Additional pressure came from downward revisions to the May and June data.

Art Hogan of B. Riley Wealth Management described the data as "unequivocally weak" and emphasized that companies are hesitating due to rising tariff costs. According to him, the situation could worsen if the U.S. fails to secure trade agreements with key partners such as Canada, Mexico, and China.

About 25 minutes into the session, the Dow Jones Industrial Average had fallen 1.5% to 43,477.54 points. The S&P 500 dropped 1.7% to 6,231.49 points, and the tech-heavy Nasdaq Composite plummeted 2.3% to 20,644.16 points.

Yields on U.S. government bonds declined sharply after the employment data release, as markets began to price in a weaker economic outlook and increased likelihood of interest rate cuts by the Federal Reserve.

Futures markets are now predicting a Fed rate cut in September.

Among the affected companies was Amazon, whose stock fell 7.0%, despite the company reporting a 35% profit increase. Investors reacted negatively to the forecast that heavy investments in artificial intelligence could put pressure on future earnings. | BGNES