Dow Jones Tumbles: Wall Street Indexes Slide, Dow Hits One-Month Lows, Down 1.4%

[Redator]

Most Read: Major NFP disappointment combined with sharp downward revisions

Wall Street's main indexes dropped sharply today due to new U.S. tariffs on many trading partners and disappointing earnings from Amazon. A weaker jobs report also made investors more cautious.

Just before the tariff deadline, President Trump signed an order adding taxes on imports from countries like Canada, Brazil, India, and Taiwan.

The U.S. added fewer jobs in July than expected, and June's numbers were revised lower, showing the job market is slowing down. After this, traders increased their expectations for a September interest rate cut to 81.9%, according to CME's FedWatch tool. The S&P 500 and Nasdaq hit their lowest levels in over two months, while the Dow dropped to a one-month low.

The CBOE Volatility Index, known as Wall Street's "fear gauge," jumped to its highest level in nearly six weeks, rising 20.66 points.

Eight out of 11 S&P 500 sectors fell, with consumer discretionary stocks dropping the most (down 3.4%) as Amazon's stock fell 6.7%. Investors were disappointed with Amazon's cloud business growth compared to strong results from AI-focused companies like Alphabet and Microsoft.

Technology and communication services sectors also fell, dropping 1.9% and 1.5%, respectively.

Apple's revenue forecast for the next quarter beat expectations, but CEO Tim Cook warned that U.S. tariffs would add $1.1 billion in costs. Apple shares dipped 0.2%.

Most big tech stocks also fell, including Nvidia (down 3.1%), Tesla (down 2.6%), Meta (down 2.5%), and Alphabet (down 1.4%).

The big losses of the day pushed the S&P 500 and Nasdaq toward weekly declines, wiping out earlier gains from signs of a strong economy, AI growth, and important U.S. trade deals with the European Union and South Korea.

Technical Analysis - Dow Jones Index

From a technical standpoint, the Dow Jones index has failed to break above the key resistance area around the 45226 handle.

This left the index vulnerable to a correction and one which needed the right catalyst.

This week has seen the index put in 5 successive losing days as the Dow hovers near one-month lows.

The only shining light may be that a key confluence area lies just below the current price. The level between 42883 and 42540 may prove to be a significant hurdle which the Dow might not be able to break.

It also appears that a golden cross may be developing as the 100-day MA eyes a crossover above the 200-day MA, which if it does occur may embolden bulls to return with ‘buying the dip’.

However, this confluence level still rests around 800-1000 points below current price. If it is not reached today, it will be intriguing to see how markets open up after the weekend.

Next week is a quiet calendar week for the US in terms of data which could either work in favor of the Dow or weigh further on the index and push it lower.

Dow Jones Daily Chart, August 1, 2025

Source: TradingView (click to enlarge)

Client Sentiment Data - Dow Jones Index

Looking at OANDA client sentiment data and market participants are short on the Dow Jones Index with 55% of traders net-short. I prefer to take a contrarian view toward crowd sentiment, however this figure actually points to indecision on the part of market participants. This could in part be down to the strong confluence level which hovers below current price.

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