Asian stock markets showed a mixed performance on Monday after Wall Street suffered its worst drop since May, triggered by a weaker-than-expected U.S. jobs report.
Investors across Asia had already reacted on Friday to U.S. President Donald Trump’s surprise announcement of sweeping new tariffs on imports from several key trading partners. The new duties are set to take effect Thursday, further rattling markets.
Tokyo’s Nikkei 225 index fell 1.6% to 40,134.97, recovering from deeper earlier losses. In contrast, Hong Kong’s Hang Seng inched up 0.2% to 24,589.21, while China’s Shanghai Composite remained nearly flat at 3,562.18. South Korea’s Kospi gained 0.7% to 3,140.92. Australia’s S&P/ASX 200 slipped 0.2% to 8,643.00.
The cautious sentiment followed the U.S. Labor Department’s report showing that employers added just 73,000 jobs in July—far below forecasts. Additionally, earlier job growth numbers for May and June were revised down by a combined 258,000 jobs.
“The labor market, once a pillar of resilience, is now looking more like a late-cycle casualty,” said Stephen Innes of SPI Asset Management, noting the shift in market sentiment from “soft landing” optimism to growing economic concern.
Despite the weak data, U.S. futures edged up 0.3% early Monday.
On Friday, the S&P 500 slid 1.6% to 6,238.01, its steepest drop since May 21 and its fourth consecutive daily loss. It ended the week down 2.4%. The Dow Jones Industrial Average lost 1.2% to 43,588.58, while the Nasdaq composite fell 2.2% to 20,650.13.
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Tech stocks were hit hard, with Amazon tumbling 8.3% despite reporting strong quarterly earnings. Apple also beat expectations but fell 2.5%, citing a potential $1.1 billion impact from new tariffs this quarter.
Adding to the turbulence, Trump’s abrupt dismissal of the head of the federal agency that produces monthly jobs data raised fears of political interference in future reports.
The disappointing jobs numbers have fueled speculation that the Federal Reserve may cut interest rates as early as September. The yield on the 10-year Treasury dropped to 4.21% from 4.39% before the report, while the 2-year yield—a key indicator of Fed rate expectations—plunged to 3.68% from 3.94%.
The Fed has held rates steady since December. While a rate cut could stimulate hiring and economic growth, it also risks stoking inflation, which remains above the Fed’s 2% target. An update last Thursday showed inflation rising to 2.6% in June, up from 2.4% in May.
Although Fed Chair Jerome Powell has faced pressure from Trump to cut rates, decisions are made collectively by the Federal Open Market Committee.
Meanwhile, American businesses and investors are grappling with the uncertainty surrounding U.S. trade policy. Companies like Walmart and Procter & Gamble have warned that ongoing and unpredictable tariff measures are driving up costs and could ultimately lead to higher consumer prices.
In commodities trading early Monday, U.S. benchmark crude fell 18 cents to $67.15 a barrel, while Brent crude, the international benchmark, dropped 23 cents to $69.44.
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In currency markets, the U.S. dollar rose to 147.80 Japanese yen from 147.26 yen, while the euro slipped to $1.1577 from $1.1598.
Source: Agency