Daily summary: Wall Street and dollar sell off on weak macro data (01.08.2025)

August begins with the topic of tariffs and disappointing macroeconomic data from the U.S., which are pushing American indices down from their recent highs (US100: -2%, US500: -1.8%, US30: -1.45%, US2000: -2%). The Trump administration has introduced new trade tariff rates. For countries that have entered into talks with the U.S. (including the UK and the EU), the rates remain relatively lower, while those that have not engaged in negotiations—or failed to reach an agreement in time—will now face higher tariff levels (including Switzerland and India).

Adding to the volatility of this turbulent session was the NFP report, which turned out to be significantly weaker than expected. Non-farm employment in the U.S. rose by 73,000 compared to estimates of over 104,000. While the data pointed to a much bleaker picture of the U.S. labor market, the biggest surprise came from significant downward revisions to previous reports.

The President of the Federal Reserve Bank of Atlanta, Raphael Bostic, stated that he is not ready to increase the number of projected interest rate cuts for 2025 and still expects only one cut this year. He emphasized that today’s NFP data would not have influenced the FOMC’s decision.

Furthermore, the U.S. President is increasing tensions between the U.S. and Russia by announcing the deployment of two nuclear submarines to areas close to Russian territory, in response to provocative comments from former President Medvedev.

On the forex market, the dollar ended its streak of gains following the disappointing report from the U.S. economy, which reignited expectations for a Fed rate cut (USDIDX: -0.9%). The strongest G10 currency today is the yen (USDJPY: -2%, EURJPY: -0.9%), while EURUSD is rebounding by 1% to 1.153. The Swiss franc and the Canadian dollar remain somewhat subdued compared to other currencies in light of the tariff hikes announced on Liberation Day (USDCHF: -0.6%; USDCAD: -0.4%).

The dollar extended its losses after ISM manufacturing data, which, together with the University of Michigan's inflation expectations, further reinforced the case for faster interest rate cuts.

Precious metal prices are soaring amid heightened volatility. Gold is up 1.75% to $3,348 per ounce, and silver is up 0.45% to $36.88 per ounce.

Energy commodity contracts are ending the week with a sell-off. Brent and WTI crude are down 2.45% and 2.3%, respectively, while natural gas is trading flat.

Negative sentiment is also evident in the cryptocurrency market. Bitcoin is down 1.7% to $114,500, while Ethereum is falling 4.4% to $3,572.