Stocks Tumble as Investors React to Trump’s Latest Tariff Moves, Weak Jobs Report

Reddit Soars as Revenue Blows Past Expectations

20 minutes ago

Shares of Reddit (RDDT) soared more than 20% Friday, a day after the social media platform turned a profit and beat revenue forecasts as it added more users.

The company reported GAAP earnings per shareof $0.45 after posting a loss per share of $0.06 the year before. That was well above the average estimate of analysts surveyed by Visible Alpha. Revenue grew 78% year-over-year to $499.6 million, while the Visible Alpha analysts were looking for $426.3 million. Advertising revenue jumped 84% to $465.3 million, also much more than expected.

Average daily active users increased 21% to 110.4 million, and average revenue per user gained 47% to $4.53.

CEO and co-founder Steve Huffman noted that this was Reddit’s most-profitable quarter ever, saying that the results were “a testament to our work, our users, and the power of Reddit’s communities.” Huffman said the company got a boost through international expansion, adding that its “machine translation is now live in 23 languages, unlocking Reddit for millions of people across Asia, Europe, and Latin America.”

The company sees current-quarter revenue in a range of $535 million to $545 million, and adjusted EBITDA of $185 million to $195 million.

The news sent Reddit shares into positive territory for the year. 

–Bill McColl

Amazon Plunges After Earnings. Analysts Say to Buy the Dip

1 hr 39 min ago

Amazon (AMZN) shares plunged after the company’s quarterly results, as investors may have been hoping for stronger cloud growth. Some analysts, though, are raising their price targets.

JPMorgan analysts said they “would buy the pullback,” and raised their price target to $265 from $255. Amazon shares were down 7% at $217 in recent trading.

Amazon Web Services is a likely culprit for the stock slump, JPMorgan said. The cloud division’s revenue growth, while in line with analysts’ expectations, didn’t accelerate from the previous quarter. Meanwhile, rival cloud offerings Microsoft (MSFT) Azure and Alphabet’s (GOOGL) Google Cloud Platform delivered breakout performances. 

On the company’s earnings call, CFO Brian Olsavsky said Amazon spent $31.4 billion in capital expenditures in the second quarter and expects to maintain that level of investment through 2025. “AWS continues to be the primary driver, as we invest to support demand for our AI services,” Olsavsky said, according to a transcript provided by AlphaSense.

Analysts at UBS, which maintained a price target of $271, said investors shouldn’t be too worried about growing capex.

 “[T]o sell the stock is to believe that management and the board are making the economically irrational decision, in our view, to invest an increasing amount of capital,” UBS said. “But we find that to be a difficult scenario to believe, especially for what has been one of the best capital allocators in our space.”

Citi, meanwhile, raised its price target to $270, arguing that the increase in investment “highlights continued demand strength as AWS alleviates its infrastructure capacity constraints.”

–Andrew Kessel

Market Expectations Shift Back to Rate Cut in September

1 hr 43 min ago

Federal Reserve Chair Jerome Powell this week squashed expectations that the central bank would be in a position to cut interest rates soon when he said more time is needed to evaluate data showing how tariffs are feeding through the economy.

Friday’s weaker-than-expected jobs report revived those expectations, with market participants now anticipating that the Fed’s policy committee will trim the benchmark fed funds rate when it meets in September.

Traders are now pricing in about an 80% likelihood that the Fed will cut its key rate by a quarter point on Sept. 17, up from the less-than-40% chance seen before the jobs data, according to the CME FedWatch Tool. Traders also now expect additional quarter point cuts in October and December.

Jobs Data Shows Labor Market Weaker Than Previously Known

2 hr 36 min ago

U.S. employers slowed their hiring in July, creating fewer jobs than economists expected, while numbers for the previous two months were revised sharply lower.

The July nonfarm payrolls report showed U.S. employers added 73,000 jobs in July, while the unemployment rate increased to 4.2%, according to data from the Bureau of Labor Statistics. Economists surveyed by The Wall Street Journal and Dow Jones Newswire projected that the economy would add 100,000 jobs in July. They anticipated that the unemployment rate would rise.

The bureau also adjusted May’s jobs gain down to 19,000, from the originally reported 144,000, while the 147,000 reported for June shrank to 14,000. 

The jobs numbers come as the Federal Reserve is closely following the labor market as part of its “wait-and-see” approach on interest rates. Inflation has remained elevated, above the Fed’s target of 2%, and ticked higher in the closely followed Personal Consumptions Expenditures index for July. Fed officials have said that a strong labor market gives the central bank time to keep rates higher in order to fight inflation. 

The latest numbers indicate that the labor market is weaker than previously known, which is likely to put pressure on the Fed to cut interest rates. The central bank earlier this week decided to leave its key rate unchanged, with Fed Chair Jerome Powell saying officials need to see more data on how tariffs are affecting inflation before adjusting rates.

Job creation has slowed in recent months, with job openings declining in June. Employers have stayed in low-hiring, low-firing limbo as tariffs and high interest rates weigh on the economy.

Trump has pressured the Federal Reserve to lower interest rates, with two members voting to lower rates last week, citing weakness in the labor market. 

–Terry Lane

Major Index Futures Point to Lower Open

4 hr 17 min ago

Futures tied to the Dow Jones Industrial Average were down 0.9%.

S&P 500 futures also fell 0.9%.

Nasdaq 100 futures dropped 1%.