Japan’s Nikkei-225 Index slumped 1.8% while shares in Australia and South Korea also declined. The MSCI Asia Pacific Index fell 0.2%, extending the selloff to a seventh consecutive day. Treasuries extended their gains with yields on the 10-year falling more than 1 basis point to 4.21%. The dollar edged lower for a second day.
The moves suggest Friday’s sharp retreat on Wall Street — sparked by rising US unemployment and slower job creation — is still rippling through global markets. The weak data is fueling investor concern after US stocks rallied for three straight months on speculation the US economy would withstand President Donald Trump’s tariff storm.
“All of a sudden, questions are being raised about the continued expansion of the US economy,” wrote Kyle Rodda, a senior market analyst at Capital.com in Melbourne. Despite the markets pricing in chances of a September rate cut, “it was risk-off in the markets, showing it was a veritable case of bad news being bad news,” he said.
Oil was down 0.6% early Monday after OPEC+ agreed to sharply hike production again in September to finish unwinding its latest tranche of supply cuts.
The S&P 500 ended Friday 1.6% lower and the tech-heavy Nasdaq 100 dropped 2%, the biggest one-day declines in months for the two benchmarks.
The US 10-year yield dropped 16 basis points Friday while policy-sensitive two-year yields fell 28 basis points. The sharp declines reflected heightened anticipation the Fed will cut interest rates in its September meeting after holding borrowing costs steady in its last meeting.
Following the jobs data, some market-watchers are even anticipating the Fed may cut rates by 50 basis points, twice the regular amount.
“September is a lock for a rate cut — and it might even be a 50-basis point move to make up the lost time,” said Jamie Cox at Harris Financial Group.
Meanwhile President Luiz Inacio Lula da Silva said Brazil is open to trade talks with Trump, but only if his country is treated as an equal to the US. In India, Trump comments about the economy and Washington’s 25% tariff rate unveiled last week have caused shock.
The US leader has also threatened to pile an additional 40% tariff on any product that Washington determines to be “transshipped” through another country.
Separately, Trump told officials to fire Erika McEntarfer, the commissioner of the Bureau of Labor Statistics, hours after the US jobs report was published Friday. He also said Fed Chair Jerome Powell should be put “out to pasture” and called on the central bank’s board to “assume control” if rates were not lowered.
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