Do you want the bad news first, or the other bad news first?

This morning, we learned that not only has the unemployment rate risen, but prior jobs gains were revised dramatically lower—revealing that the US labor market is on far weaker footing than we thought.

Here are the details:

• The unemployment rate climbed to 4.2% in July from 4.1% in June
• Payrolls increased just 73,000 last month, far below forecasts of roughly 104,000
• Even worse: May’s job numbers were revised from 144,000 to only 19,000, while June jobs were cut from 147,000 down to 14,000.
• Which means over the past three months, employment has only risen an average of 35,000—the worst three months of jobs growth since the pandemic years.

“Had those figures been the initial prints a month or two ago it would have significantly changed the labor market narrative over the entire summer,” explained Global Head of Multi-Asset and Portfolio Manager at Janus Henderson Investors Adam Hetts in a note today.

Where did all those jobs go?

Previous monthly numbers are always revised, but the sudden disappearance of 258,000 jobs is raising eyebrows across Wall Street. It sheds light on a growing problem: Economic data is getting harder and harder to trust.

Earlier this year, the White House dismissed two independent advisory committees that provided input on macro data like prices and unemployment. Last month, the Bureau of Labor Statistics—the department behind today’s jobs report—announced it was cutting back on collecting price data that feeds into inflation measurements due to layoffs and budget cuts. And just earlier this week, the BLS noted that it collected 19% less data in June than it had in May due to those cutbacks.

Apparently, the president was just as unpleasantly surprised as the rest of us. Trump fired BLS commissioner Erika McEntarfer this afternoon, taking to Truth Social to note that she is a Biden administration appointee, and implying that she manipulated job numbers for political reasons.

The Fed is torn

This economic puzzle is not an easy one for the Fed to figure out, and that’s before even considering the added complications that come with Trump doing everything he can to undermine Jerome Powell’s credibility.

The central bank kept interest rates steady yesterday, but today’s jobs numbers—along with a slew of other macroeconomic data points pointing to a weaker economy and persistent inflation—seems to suggest a rate cut could be in our future.

Traders are currently pricing in a 93.7% chance of a rate cut at the Fed’s September 17 meeting—which is a whole lot higher than the 37.7% probability of a rate cut the market had priced in yesterday, before today's labor market letdown.—LB

🟢 What’s up

• Figma kept on climbing after its explosive market debut yesterday. Shares of the software design company rose another 5.44%.
• Reddit was upvoted 17.27% by shareholders who loved to see the social media site’s daily active unique visitors climb 21% last quarter.
• First Solar gained 5.29% on a solid quarter for the solar panel maker and management’s cautious optimism that new regulations won’t hurt business as badly as previously thought.
• Rocket Companies, parent company of Rocket Mortgages, jumped 11.88% thanks to a better-than-expected quarter due to strong loan originations.

What’s down

• Coinbase crumbled 16.70% after revenue missed estimates last quarter and trading volume fell due to a relatively tame quarter for crypto.
• Moderna may have beaten top and bottom line estimates last quarter, but shares of the vaccine maker still fell 6.61% after it cut its fiscal guidance.
• MicroStrategy beat earnings estimates, but the stock sank 8.77% after shareholders realized it was only due to an accounting change that lets the company factor in unrealized gains from its massive bitcoin hoard.
• TopGolf Calloway Brands lost 12.22% after CEO Artie Starrs announced his resignation.
• Columbia Sportswear fell 12.85% on the news that the retailer expects earnings and revenue to come in well below analyst forecasts next quarter thanks to trade uncertainty.
• Eastman Chemical Co. dropped 19.03% after not only missing analyst forecasts for both sales and profits this quarter, but also cutting its earnings guidance for the current quarter.
• Fluor plunged 26.99% after the construction company missed analyst estimates last quarter and cut its fiscal 2025 outlook.

Earlier this week, two Federal Reserve governors dissented with the FOMC’s decision to keep interest rates steady, the first time that’s happened since 1993. Now, we know why.

Fed Governor Christopher Waller wrote in a statement that he believes the Fed should cut rates because the effects from tariffs have been “small so far,” and “are one-off increases in the price level and do not cause inflation beyond a temporary increase.” He also noted that although the labor market appears healthy, risks are rising. “When labor markets turn, they often turn fast,” he warned—a statement that appears prescient given today’s jobs report.

Vice Chair for Supervision Michelle Bowman echoed Waller, noting that tariffs haven’t hit as hard as expected. “In terms of risks to achieving our dual mandate, I see that upside risks to price stability have diminished as I gain even greater confidence that tariffs will not present a persistent shock to inflation,” she wrote. She also warned that the labor market looks fragile, and that companies may start laying off workers if demand doesn’t improve.

One person is all-too-happy to foment further dissent among central bank ranks. President Trump encouraged the Federal Reserve Board to “ASSUME CONTROL” of the Fed if Jerome Powell doesn’t cut interest rates. While we’re still a long way from a coup, today’s jobs report, coupled with growing division in the FOMC, may finally force Powell to give Trump what he wants and cut rates sooner rather than later.—MR

Big tech is facing big challenges these days, and the latest earnings from Apple and Amazon suggest that they’re struggling in an increasingly crowded market.

Apple sank 2.50% despite reporting a record-high $94 billion in revenue in Q3, surpassing analysts’ expectations of $89.3 billion. Much of this was due to the iPhone, the company’s main moneymaker, which raked in $44.58 billion—well beyond the anticipated $40.06 billion.

This windfall comes at a time when Apple is facing the possibility that President Trump will impose a 25% tariff on iPhones unless the company starts making them in the US. Tariffs cost Apple $800 million in Q2, and the bill is expected to balloon to $1.1 billion in Q3. CEO Tim Cook assured shareholders that Apple plans to “do more in the United States,” like opening an Apple Manufacturing Academy in Detroit in August to help train US manufacturers.

But the elephant in the room is what Apple is doing about AI. Siri pales in comparison to competitors ChatGPT and Google, and although a “more personalized Siri” is expected to debut next year, skepticism is high. Concerns also linger over Google’s antitrust lawsuit, which could impact Apple’s agreement to use Google Search as the default search choice in Siri and the Safari browser.

Nonetheless, Cook promised that the company is “significantly growing” its investment in artificial intelligence, and isn’t afraid to pay for it, adding that the company is “very open to M&A that accelerates our road map.”

Amazon’s AI problems

Meanwhile, Amazon stock slid 8.27% today, despite beating top and bottom line estimates in Q2 with revenue of $167.7 billion and earnings per share of $1.68.

Despite the looming threat of tariffs, e-commerce sales grew 11% to $30.8 billion, in line with expectations. As CEO Andy Jassy explained on the earnings call, “We just haven’t seen diminished demand.”

Although online shopping remained robust, the company has been struggling to maintain its lead in cloud computing. Amazon Web Services (AWS) revenue grew by 18% year over year, and while this was in line with expectations, it trailed the insane gains made by rivals Microsoft and Alphabet, which posted cloud growth of 39% and 32% last quarter, respectively.

Still, Jassy pointed out it’s “very early days” in the AI race, adding that Amazon has the perfect monetization vehicle: Alexa+, a souped-up version of its original digital assistant. Launched in March, Alexa+ has been hailed for its ability to handle more complicated tasks and is less prone to respond with “Hmm, I'm not quite sure how to answer that.”

Is it enough to keep Amazon a leader in the AI race? Hmm, I’m not quite sure how to answer that.—JD

• Both Chevron and Exxon Mobil pumped more oil out of the ground last quarter than either company ever has before, though their profits fell to 4-year lows.
• Some users are reporting that rather than receiving their entire order of Figma shares, Robinhood only gave them one share each.
• Goldman Sachs’ next big investment is an ice cream maker valued at 15 billion euros.
• Ray Dalio has officially sold his final shares of Bridgewater Associates.
• Federal Reserve Governor Adriana Kugler announced her resignation.
• Palantir inked a $10 billion deal to streamline US Army contracts.

Phew, what a week. The economic calendar takes a bit of a breather next week: Monday kicks off the slow start with June factory orders, while Tuesday delivers the July ISM services report and the June trade balance. Thursday kicks things up a notch with US Q2 nonfarm productivity, unit labor costs, June consumer credit, wholesale trade sales, and the usual initial jobless claims report.

While economic news gears down, the earnings season keeps on trucking.

Monday: Palantir, MercadoLibre, Hims & Hers Health, Vertex, Williams Cos, Wayfair, and Tyson Foods

Tuesday: AMD, Caterpillar, Amgen, Eaton, Arista Networks, Pfizer, BP, Apollo, Marriott, Zoetis, Diageo, Coupang, Yum! Brands, Infineon, Super Micro Computer, DuPont de Nemours, Rivian Automotive, and Snap

Wednesday: Novo Nordisk, McDonald's, Walt Disney, Uber, Shopify, AppLovin, DoorDash, Siemens Energy, Airbnb, Emerson Electric, Fortinet, CRH, Honda Motor, Glencore, Occidental Petroleum, Rockwell Automation, Bayer, NRG Energy, DraftKings, Duolingo, and Lyft

Thursday: Eli Lilly, Toyota, Siemens, Allianz, Sony, Gilead Sciences, ConocoPhillips, SoftBank, DBS, Constellation Energy, Rheinmetall, Vistra, Flutter Entertainment, Atlassian, Cheniere, Datadog, Block, Kenvue, Take-Two Interactive Software, Warner Bros. Discovery, Pinterest, Expedia, Rocket Lab, Twilio, NuScale Power, Maplebear, Monster Beverage, Wynn Resorts, and Peloton

Friday: Wendy's, Under Armour, and FuboTV