Morning Wrap: ASX 200 to fall, S&P 500 and Nasdaq tank on weak jobs data

ASX 200 futures are down 32pts (-0.37%) as of 8:30 am AEST.

In a nutshell:

• Major US benchmarks tumbled after weak June employment data and a shocking downward adjustments to the prior two months

• Amazon shares tumbled 8.2% after its cloud division missed analyst expectations

• The weak data bolstered Fed rate cut bets, with the likelihood of a 25 bp cut in September rising to 89.1% from 61.9% a week ago

Let's dive in.

S&P 500 SESSION CHART

S&P 500 gapped down, finished near worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished sharply lower, near worst levels

• Big tech was broadly lower, with Amazon (-8.2%) and Apple (-2.5%) both down after earnings

• Today’s big story: US July jobs report was softer-than-expected alongside a significant downward adjustment to prior two month data, this comes following Waller and Bowman’s vote to cut rates at last week’s Fed meeting

• US 10-year yield down 16 bps to the lowest since 2-May and likelihood of a September cut spiked to 89.1% from 61.9% a week ago 

• US weekly recap: Russell 2000 (-4.17%), Dow (-2.92%), S&P 500 (-2.36%), Nasdaq (-2.17%) 

• Big Tech posting huge earnings growth but consumer-facing companies struggling with rising tariff costs (FT)

• Goldman Sachs warns investors to hedge as corporate bond yields hit 2007 lows (BBG)

• Trump's copper tariff reversal sparks $3.54bn win for bearish options traders (BBG)

STOCKS

• Apple revenue growth tops expectations amid strong iPhone sales, up 10% year-on-year, and rebound in China, warns of $1.1bn tariff hit (BBG)

• Amazon operating profit guidance below expectations, AWS revenue growth of 17.5% underwhelmed, AWS margin contract an area of scrutiny (BBG)

• Berkshire Hathaway operating profit drops, report warns of potential adverse consequences from rapidly evolving trade/tariff policies (CNBC)

• Vale earnings exceed expectations, driven by stronger nickel and copper output, lower China iron ore shipping costs (BBG)

• AXA's first-half 2025 profit misses expectations amid currency headwinds (WSJ)

• Toyota and Honda face profit dip as yen strength and US tariffs bite (BBG)

• Nintendo's Switch 2 smashes records with 6m sales in seven weeks despite US tariff challenges (FT)

CENTRAL BANKS

• BoE likely to cut this week despite the fastest inflation in 17 months (BBG)

TARIFFS 

• White House issues tariffs for trading partners, baseline rate stays at 10% (BBG)

• Trump's reciprocal duties estimated to raise effective US tariff rate to post-WW2 high of 15.2% (BBG)

• Trump hikes Canada tariffs to 35% from 25%, but still applies only to non-USMCA goods (BBG)

• Thailand praises 19% tariff, says it will maintain country's competitiveness (RT)

• Japan's Akazawa believes Japan can secure 15% tariff for planned chip tariffs (NK)

ECONOMY

• US July non-farm payrolls up 73,000 month-on-month vs. consensus for a 115,000 increase, employment in June and May was revised sharply lower (June down to +14k vs. +147k, May revised lower to 19k from 144k) (BBG)

• US July ISM manufacturing PMI contracts at fastest pace in nine months, down to 48 vs. consensus 49.5, respondent feedback was cautious with widespread concern about tariff costs, leading to difficulties in forecasting, sourcing and investments (BBG)

• Eurozone inflation holds steady 2.0% in July amid lower energy costs and stronger euro (FT)

• Eurozone manufacturing PMI nears stabilisation in July, hits 49.8, in-line with consensus and the highest level in three years (RT)

• UK manufacturing downturn eases in July, PMI remains in contraction at 48 but the highest in six months

ASX TODAY

Check out our Live Blog for the latest coverage and analysis for company announcements, market movements and economic updates.

• Greatland Gold under AISC questioning after poor FY26 guidance despite sound prospectus guidance just two months ago (AFR)

• HMC Capital reaches financial close for Neoen Australia's Victoria assets, which delivered preliminary EBITDA of $64m in FY25 (HMC)

• Lendlease has four keen bidders through to final round of bidding for a 25% stake in Keyton (AFR)

• Ramelius Resources guides to FY26 Mt Magnet production of 200koz, sees gold production more than doubling to 500koz by FY30 (RMS)

• Silver Mines seeking to raise $30m at 12 cents per share (AFR)

• Tourism Holdings rejects buyout bid of $2.30 per share, says the company is worth well north of $3.00 vs. current $1.87 share price (THL)

• Wisetech completes acquisition of E2open for $2.1bn (WTC)

WHAT TO WATCH TODAY

• Tech weakness: Tech was the worst performing S&P 500 sector overnight (-2.07%). Though the local tech sector already fell sharply last Friday (-2.38%). Let's see where the dust settles.

• Pullback dynamics: Pretty heavy overnight session, with the S&P 500 now trading at the lowest level since early July. We could see some rotation dynamics at play, as sectors like Healthcare, Staples and Utilities finished the session higher. The soft economic data bolsters rate cut expectations and strong quarterly earnings should provide solid support for this pullback. But with the sharp spike in VIX and markets previously trading at record levels, we could be in for some volatility.

BROKER MOVES

Broker data is currently pending.

Stocks trading ex-dividend: 

• Mon 4 Aug: None

• Tue 5 Aug: Australian Foundation Investment Company (AFI) – $0.195, BKI Investment Company (BKI) – $0.04

• Wed 6 Aug: None

• Thu 7 Aug: Djerriwarrh Investments (DJW) – $0.083

Other ASX corporate actions today: 

• Dividends paid: None

• Earnings: Beach Energy (BPT)

• IPOs: None

• AGMs: Domain Holdings (DHG)

Economic calendar (AEST):

No major economic announcements.