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Amazon ( AMZN ) slides after cloud computing growth underwhelms

investors

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U.S. job growth slowed more than expected in July

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Indexes down: Dow 1.37%, S&P 500 1.78%, Nasdaq 2.43%

(Updates to afternoon trading)

By Chuck Mikolajczak

NEW YORK, Aug 1 (Reuters) - U.S. stocks slumped on

Friday, with the S&P on track for its biggest daily percentage

decline in more than three months as new U.S. tariffs on dozens

of trading partners and a surprisingly weak jobs report spurred

selling pressure.

Also weighing on equities was a tumble of nearly 9% in

Amazon.com ( AMZN ) shares after the company posted quarterly

results but failed to meet lofty expectations for its Amazon Web

Services cloud computing unit.

Just hours before the tariff deadline on Friday, President

Donald Trump signed an executive order imposing duties on U.S.

imports from countries, including Canada, Brazil, India and

Taiwan, in his latest round of levies as countries attempted to

seek ways to reach better deals.

Further denting confidence in the economic picture, data showed

U.S. job growth slowed more than expected in July while the

prior month's report was revised sharply lower, indicating the

labor market may be starting to crack.

The report significantly pushed up expectations the Federal

Reserve will cut interest rates at its September meeting.

"There's no way to pretty-up this report. Previous months were

revised significantly lower where the labor market has been on

stall-speed," said Brian Jacobsen, Chief Economist at Annex

Wealth Management in Menomonee Falls, Wisconsin.

"Last year the Fed messed up by not cutting in July so they did

a catch-up cut at their next meeting. They'll likely have to do

the same thing this year."

Market expectations the Fed will cut rates by at least 25 basis

points at its September meeting stood at 80.9%, according to

CME's FedWatch Tool, up from 37.7% in the prior session.

The Dow Jones Industrial Average fell 604.56 points,

or 1.37%, to 43,526.42. The S&P 500 lost 112.80 points,

or 1.78%, to 6,226.59 and the Nasdaq Composite lost

512.52 points, or 2.43%, to 20,609.93.

Both the S&P 500 and the Nasdaq were on track for their worst

single-day performance since April 21 and each of the three

major indexes were on track for weekly losses.

The CBOE Volatility index, also known as Wall Street's

fear gauge, jumped to its highest level since June 23 and was

last at 20.95.

Amazon ( AMZN ) was the biggest drag on the Dow, S&P 500 and Nasdaq and

pushed the consumer discretionary sector, down nearly

4%. The defensive consumer staples index was the best

performing S&P sector on the day.

Also reporting earnings was Apple ( AAPL ), which fell 2% after

it posted a current-quarter revenue forecast well above Wall

Street estimates, but CEO Tim Cook warned U.S. tariffs would add

$1.1 billion in costs over the period.

Stocks briefly extended declines after Trump said he ordered the

commissioner of the U.S. Bureau of Labor Statistics, Erika L.

McEntarfer, to be fired in the wake of the jobs data.

In contrast to the broad declines, Reddit ( RDDT ) surged 19.4%

after it reported quarterly results that exceeded Street

expectations, boosted by an AI-focused advertising strategy and

strong user engagement.

Declining issues outnumbered advancers by a 2.48-to-1 ratio on

the NYSE, and by a 3.17-to-1 ratio on the Nasdaq.

The S&P 500 posted eight new 52-week highs and 28 new lows,

while the Nasdaq Composite recorded 21 new highs and 191 new

lows.