Asian Stocks Slide as Soft Jobs Data, Trump Tariffs and OPEC+ Weigh on Mood

GLOBAL MOOD: Risk Off
Drivers: Weak US jobs, OPEC+ supply boost, Global Tariffs

Asian stocks slipped at the open as soft US jobs data spooked investors and revived hopes of a Fed rate cut. Oil also pulled back after OPEC+ agreed for big output hikes. After three months of gains, US stocks are looking shaky again, especially with Trump’s fresh wave of tariffs stirring up trade worries. Ongoing OPEC+ moves and global uncertainty are keeping markets on edge as the new week kicks off.

TODAY’S WATCHLIST
 - RBI MPC 3-day Meeting Begins
 - Earnings: DLF, Marico, Bosch

THE BIG STORY
OPEC+ agreed on Sunday to raise oil production by 547,000 barrels per day for September, accelerating its push to regain market share as concerns grow over possible supply disruptions linked to Russia. The decision marks a full and early reversal of the group’s largest tranche of output cuts. In addition, the deal includes a separate increase for the United Arab Emirates, bringing total additional supply to about 2.5 million barrels per day – equivalent to roughly 2.4% of global demand. 

The move comes as markets weigh the combined impact of fresh US tariffs on major trading partners and ongoing geopolitical uncertainty. US President Donald Trump’s sweeping tariffs on dozens of trading partners have triggered turmoil across global markets. The new measures impose rates as high as 50% on some countries, including 35% on Canadian goods, 50% for Brazil, 20% for Taiwan, and 39% for Switzerland, as governments scramble to secure more favourable trade terms.

DATA SPOTLIGHT
US employment growth slowed sharply in July, with nonfarm payrolls rising by just 73,000 versus expectations of 110,000. The previous two months’ figures were revised down by a combined 258,000 jobs, pointing to a significant weakening in labour market conditions. The unemployment rate rose to 4.2% as household employment declined, underscoring mounting pressure on the economy from trade and immigration headwinds. June payrolls were revised down to 14,000 from 147,000, the lowest monthly gain in nearly five years, while May’s figure was cut by 125,000 to 19,000. 

Takeaway: The July jobs report revealed a sharp slowdown in US employment growth and large downward revisions to prior months, signalling weakening labour market momentum. Rising unemployment and soft payroll gains increase pressure on the Federal Reserve to cut rates as early as September. 

WHAT HAPPENED OVERNIGHT

• US stocks tumble on weak jobs data and new tariffs
  
  • Wall Street slumped on Friday as fresh US tariffs and a weaker-than-expected jobs report triggered a sharp sell-off.
  • The S&P 500 fell 2.36% for the week, its sharpest one-day decline in over two months; the Nasdaq dropped 2.17%, and the Dow lost 2.92%.
  • Amazon sank 8.3% after AWS growth disappointed, while Apple dropped 2.5% despite issuing an upbeat revenue forecast as CEO Tim Cook warned of $1.1 billion in added tariff costs this quarter.
    
    
• US Treasury yields plunge on weak jobs report
  
  • Treasury yields dropped sharply on Friday as a disappointing US jobs report boosted expectations of a September rate cut.
  • The 10-year US Treasury yield fell 14 bps to 4.22% and the 30-year yield dropped 6.4 bps to 4.821%.
  • The 2-year yield, which is highly sensitive to Fed policy, tumbled 26.1 bps to 3.69%.
    
    
• US dollar tumbles after weak jobs report fuels rate cut bets
  
  • The Dollar Index fell 1.37% to 98.66 on Friday as a softer US jobs report triggered heavy selling.
  • The euro rose 1.52% to $1.1589, while the yen strengthened 2.26%, pushing the dollar down to 147.32 – its largest one-day drop against the yen since January 2023.
  • Traders sharply increased bets on multiple Fed rate cuts this year following the disappointing jobs data and downward revisions to June payrolls.
    
    

• Crude oil prices slide on OPEC supply concerns and weak jobs data
  
  • Brent crude oil prices fell 2.83% to $69.67 a barrel, while WTI dropped 2.79% to $67.33.
  • Prices declined on Friday as markets reacted to concerns that OPEC and its allies may increase production.
  • A weaker-than-expected US jobs report also fuelled demand worries, adding pressure to oil markets.

Day’s Ledger 

Economic Data

• US June Factory Orders Data

Corporate Actions

• Earnings: Aditya Birla Capital, Deep Industries, DLF, Escorts Kubota, Everest Industries, Godfrey Phillips India, INOX India, Kansai Nerolac Paints, Marico, Ramco Industries, Sundaram Finance, Tata Investment Corporation, Tourism Finance Corporation of India, TTK Healthcare, Akzo Nobel India, Aurobindo Pharma, Bosch, 
• Tata Investment Corporation to consider stock split
• Agi Infra to consider stock split
• Godfrey Phillips India to consider bonus share issue

Policy Events

• RBI Monetary Policy Committee 3-day Meeting Begins

TICKERS TO WATCH

• ITC Ltd revenue rose 20.6% YoY, but margins were hit by higher tobacco costs.
• TATA POWER net profit grew 6.2% YoY to ₹12.62 billion on stable operational metrics.
• LIC HOUSING FINANCE net profit up 4.4% YoY to ₹13.64 billion, aided by 7% revenue growth.
• FEDERAL BANK profit fell 14.7% YoY to ₹8.62 billion as asset quality softened.
• DILIP BUILDCON JV with RBL Bank bagged ₹15.04 billion Gurugram Metro contract.
• ABB INDIA profit down 20.7% YoY; declared ₹9.77 interim dividend despite forex hits.
• GR INFRAPROJECTS profit surged 57% YoY to ₹2.44 billion, even as revenue dipped slightly.
• RAILTEL received ₹1.66 billion BSNL work order; execution to run till July 2028.
• MCX profit jumped 49.9% QoQ to ₹2.03 billion; board approved 1:5 stock split.
• NARAYANA HRUDAYALAYA profit declined 2.3% YoY to ₹1.93 billion despite strong revenue growth.

MUST READ

• Latest Trump tariffs unlikely to budge, top negotiator says
• Top Trump aide accuses India of financing Russia's war in Ukraine
• NSE pays markets regulator $4.6 million to settle data sharing case
• Modi Urges Indians to Buy Local Goods After Trump Tariffs
• Elon Musk’s Empire Is Creaking Under the Strain of Elon Musk
• How much India should trade with Russia must not be guided by Western diktat
• Trump’s surprise 25%+ tariff could pull down India’s GDP growth below 6%
• 1.7 million immigrant jobs vanish in latest US data
• Asia factory outlook at lowest since pandemic on Trump tariffs

See you tomorrow with another edition of The Morning Edge.

Have a great trading day.

Govt Should Not Take Opposition’s Bait on Trump Tariffs, or Vocabulary   

Trump’s tariffs and his choice of words may trigger loud politics, but the Indian government would be wiser to stay calm. Saibal Dasgupta writes, escalating tensions with Washington would not help at a time of fragile geopolitics.