A Post-Jobs Report Market Sell-Off… And Construction And Biotech Bucking The Downtrend 8/1/25

0:02Live from the Nasdaq market, right in the heart of New York City's Times Square. This is Fast anguish. The tech giant erasing more than a month's worth of gains after its earnings last night and leading the losses in the Nasdaq 100. What warning signs could be found in the results and can the company stage a rebound from here? Plus, charting the utility stocks with the sector at records are any names worth a buy now. Figma in focus on its second day as a public company and a couple dots of green and otherwise deeply red market. We make sense of the up moves in a trio of sectors. I'm Melissa Lee coming to you live from Studio B at the Nasdaq on the desk tonight.

0:49Bono and Eisen, Steve Grasso, Tim Seymour, and Carter Braxton Worth. We will get to the President Trump's to President's firing of the Labor Statistics Commissioner in just a moment, but we start with what amounted to be a very sharp sell-off to wrap up the market's worst week since May. The S &P dropping 1.6 percent, its fourth day of losses in a row. The benchmark index, which hit an intraday record just yesterday, hitting its lowest level in two weeks. The Nasdaq saw even bigger losses, down more than 2 percent, while the Dow shed nearly 550 points. Yields, meantime sinking the two-year down over 25 basis points.

1:21That's its biggest drop in nearly a year. The flight to safety coming after a much weaker than expected jobs report payrolls growing by 73 ,000 in July. That is less than the 100K estimate. And June numbers were revised sharply lower as well. The disappointing data upping the chances of September rate cuts by the Fed from less than 40 percent to more than 80 percent. But what does that say about the strength of the economy and the recent rally. Steve, what do you say? Yeah. So we've had the fastest and the strongest recovery from a sell-off back in April that we've ever had in the history of the markets.

1:57So this was sort of primed. Everyone questioned what we priced to perfection. So if you look at everything that the market has done well, it's checked all the boxes. If you look at everything that the market has done wrong, there's only been a few things, Right. So the the lower left, upper right still on track. But we are due for a little bit of a pullback. Tuesday, we had an outside reversal day. Yesterday, we almost had another one, but we didn't close lower than the prior day's lows. Then we had a now we have a lower week that we haven't seen in a couple of weeks. So there's a lot of technical things that are brewing.

2:34We have 70 percent of the trade deals that are done. There's a lack of catalyst. You have a big tech, big cap tech, as all reported and done well. So if you think about where the next catalyst is coming from, you probably struggle a little bit. You have tariffs. You have Russia. You have a bunch of things that are negative headwinds right now. So I think you're good to sort of let it all clear out for a little bit, reset, and then the market will get back on track. One last thing. Just remember how quick we recovered in April. You don't want to sell this market. We recovered in seven days from that.

3:08The market was off in two days, 10 percent, and was up in one day, nine and a half percent. So the market is always torqued for that. Just be careful. I think even without the weak jobs data, you could have made a case early this morning, Bono, and that it was time for the markets to pull back. But adding that jobs report, how much more concerned are you that this is not just a pullback, that this is an actual growth scare, perhaps, in the making? I would say materially more concerned. To Steve's point, I do think that that previous kind of April reversal and then strict rally or steep rally has informed investors.

3:42And I think perhaps they're a little bit less gun shy to kind of like pull the trigger and take profits when we're still in a positive situation. We just came off the back of earnings. To your point, all of the catalysts that have primed the market for that rally, the majority of those are now off the table. So there's kind of assume that we don't have the report today. There was already a benign situation with few catalysts. So it made sense to kind of take some profits, particularly given how narrow the rally that led us up here was. It really was tech and tech adjacent. You can argue utilities.

4:12You can argue data centers. But all of that stuff has to do on the AI play. I think the jobs number today, I would say, listen, there has been divergence between ADP and non-farm payrolls. But the prior two months revisions, I think, give you additional concern. Because the argument, and then you have the GDP number, which was revised higher. But then you might make the argument that perhaps that was kind of a lot of tariff pull forward. So I think the macro setup is murky enough and is now the new focus where it made sense for us to kind of pause. I think us seeing perhaps a bit of weakness in the labor market is the canary in the coal mine.

4:49And a prudent trader would be taking some profits without with the additional cloudiness to visibility. You know, we had some pretty strong earnings out of Big Cap Tech this week, Tim. But we also had a number of companies actually outlining what they are seeing right now is the impact of tariffs, whether it be, you know, a GM, for instance, or Mattel. I mean, it really runs the gamut in terms of the impact here. And then we get this jobs report. So in your view, I mean, we always knew that the impact of the tariffs would be delayed. Are we starting to enter the period where we should actually be much more concerned about the tangible impacts of those tariffs?

5:24Well, I think getting back to both the market's performance and Steve referenced how quickly the market recovered. But I would argue it wasn't just a seven day sell off or seven day recovery. I mean, the market started to sell off in early March and it was selling off on the prospect of tariffs. So if we are now here and again, if the market sells the fact, again, we're not selling the fact that we've gotten there. It's time to sell markets. We're really selling the reality of what they mean. And, you know, back to that payroll number, it's not that the labor market weakened. It's that it dramatically weakened.

5:57It's as if somebody pulled the corporate out from under. When you're told that the average, that the three-month moving average now on labor is $35 ,000 and that the U6, so the underemployed amount is going up and is at five-month highs, it's a very different labor market than what we had. Now, as we said on Monday, I know we had this conversation. We had it a week ago going into this big week that the labor and the payroll number was the biggest announcement of the week. So I think you have to at least acknowledge that this is a significant moment for the market. Now, having said all that, I do think it's very unclear.

6:34And sometimes that's enough for markets to sell off. We're going into a long weekend. Geopolitics, if you started the year, might have been the biggest issue for people out there. And we've raised another geopolitical flag out there. So hard to freak out for all the reasons that have been spoken about so far tonight. It's it's been a fantastic move to the upside. I'll just say this, too. This earnings season has been fantastic. They've you know, they've earnings growth is around nine percent. Revenue growth is around seven percent. The beats are, you know, seven to seven and a half percent. The revenue beats are almost four percent.

7:09So these numbers are reflecting companies that are doing better in an environment where people thought they wouldn't. Is it a long weekend? Tim? Well, it's a long weekend. It's going to be a long weekend. Oh, it's going to be a long weekend. Okay. I'm giving you Monday off, Melissa, because you deserve it. You worked so hard this week. But I mean, I mean, it's a long weekend in that any time you go into a summer weekend, it's a quiet time. It can be a long weekend in the world where I think liquidity is actually quite light. It can be treacherous. Yes. With low vol these days. Volume, that is.

7:46Carter Braxton Worth. Yes. Does this sell off concern you at all? I mean, on the surface, let's just say what it's two days in duration. like one would have to get out a microscope to see it. And it's, what, 3 % plus minus, which is also diminuous and minor. The question, and you all are batting it around now, is this the beginning of something more meaningful? I think the precondition for the sell-off, all the things that might be in effect are clearly in effect to move some 33 % off the plunge low of April, the tariff low, and a lot of money pushed into the market. many stocks 100%. If you look at the SPY chart that's on the screen, we've exceeded the high of the pre-tariff sell-off.

8:32And I've annotated that at 631. It's actually 613. And so support, even as you sell off, is the prior high from which you broke out. So support begins at 613. free. And support, however, and here's the second chart, is not a plywood board. It is not a concrete floor. It is a mattress top. You get to support and you can sink into and often do sink into support, further into support until indeed you start to come up off the mattress, just like a child bouncing on the bed in the hotel room. And so when you're down a mere 3%, it's nothing. Support goes all the way down 5, 6, 7%. The lower band of that chart is down about 10%.

9:14Now, that would be a normative give back, drawdown, sell off, decline, correction, drop, whatever nomenclature one prefers. But what's happened so far is entirely and absolutely nothing. Two days, three percent. There's every indication it should be more. Meantime, amidst a sell off, there are fireworks in Washington, D.C. today. President Trump is demanding the firing of the Commissioner of Labor Statistics hours after the jobs report. Fed Governor Adriana Kugler also announcing plans to step down next week, clearing the way for a Trump appointee on the Fed. CNBC's Steve Leisman's got the latest on all of this.

9:48Steve. Melissa, the president asserting without offering any evidence that today's bad jobs report was rigged for political reasons, and he fired the commissioner of the Bureau of Labor Statistics, Erica McIntyre. The president wrote, quote, In my opinion, today's jobs numbers were rigged in order to make the Republicans and me look bad, just like when they had three great days around the 2024 presidential election, And then those numbers were taken away on November 15th, 2024, right after the election, when the jobs numbers were massively revised downward, making a correction of over 818 ,000 jobs, a total scam.

10:24Today's revisions to prior months were large, but they have been bigger than usual since the pandemic, the result of a problem with response rates from companies. The president, though, made a pretty big mistake with this November date, undermining his own political charge there, as can be seen from this CNBC article. The BLS announced the 818 ,000 downward revision to 2024 job growth in August, three months before the election, not after. It's unclear if the president has any other data showing that the job market is stronger than it appears on the BLS data. The president's actions, however, risk undermining confidence in U.S.

10:59economic data, which many economists say is the global gold standard because, in part, revisions use new and better data to make and provide that confidence. Separately, Adriana Kugler, the Fed governor, she announced that she was on on August 8th. She has served since April 2022. This opens a seat for a presidential appointment five months earlier than originally expected. Melissa. Just curious, Steve, were there any changes in the odds for a rate cut based on Kugler stepping down? I don't know about that on a rate cut on Kugler. I'm seeing here. Let's see the latest now. I will tell you what's happened to the September odds, which have been north of 90 percent.

11:46They went from 40 to 90 after the jobs number this morning, 45 to 90. And they're now about 96. So maybe a slight increase after the Kugler announcement. The president will probably take a couple of months to be getting Senate approval, announcement and approval. Maybe by September, a new person could be in place. I'd say that's the earliest. So the October meeting, more likely, but maybe September. And then you have also what looks like a 90 percent, almost 100 percent, it looks like, odds for a December rate cut. So two built in. And who knows? There could be three. If these jobs numbers deteriorate further, we'll get we could even get three quarter point rate cuts this this year, depending upon the inflation numbers remaining under control.

12:30Melissa. Right. Politics aside, and I understand that's tough because this is basically all politics here that we're talking about, Steve. But in terms of the revisions, they do seem like there have been bigger swings in recent history than in the past. So is there an argument to be made not that they are doctored, but that there is something in the methodology and how it's calculated that is causing this volatility? So there's two stories here that need to be discussed. The first is the idea that the response rates have been lower since the pandemic. and these are eventually trued up. But the question becomes why there are downward revisions.

13:08I've read a paper, maybe two papers, on this notion that there's a bias. Those responding are more likely to be those hiring and it's those who are firing or remaining stagnant with their workforce who are later, where the BLS gets that data later. That's a problem. I know the BLS knows this is a problem. I know they have requested some funding to make changes of their statistics they routinely either cut or turn down for additional funding. What's really interesting here is whether or not big data from the private sector can help out. The ADP numbers look a little bit better now. Those are pretty much thrown out by a lot of Wall Street economists because they don't really match the BLS.

13:50But that weakness showed up relatively early in the ADP. But the president, Melissa, getting back into the political thing, seems to be rejecting the idea that jobs are weak at all, that the jobs numbers are, in fact, strong, and I'm not sure where he's looking for that or looking at to come to that conclusion. Steve, thank you. Steve Leisman. Pleasure. For more on all of this, as well as the markets, let's turn to David Zerbos. He's CNBC contributor and chief market strategist at Jefferies. David, always great to see you. Fantastic to get your perspective because you were at the Fed, correct?

14:24You're a Fed economist at one point in your life. Many, many years ago. Is there any reason, in your view, as a market strategist now, to question the methodology of how jobs are calculated? That there might be a political aspect to it. I mean, I think we always want to question the data. We know it could be done better. I think your point, Melissa, was a good one. Why is it that it seems more volatile now than it's been in the past? And I don't think we have good answers to that. I think this administration sees a lot of politics behind the scenes, and it's a little worried about how those politics are playing out.

15:01It sees a swamp. It's called it a swamp in both Trump one and in Trump two. And I think they're sort of maybe shooting first and asking questions later a little bit when it comes to appointees. And they have the right to change these folks out. That's kind of the prerogative of the president. These are political appointees with Senate confirmation. And to the extent that the September rate cut seemed to have some political biases in it, you could go back all the way to Janet Yellen in 2016 and her non-commitment to raise rates after she was committed to raise rates going into the initial Trump won election.

15:41There's a lot of undercurrents of politicization that I think are there. And I think, you know, kind of gutting it is sort of not to be I'm not surprised by it. Let's put it that way. Would you be concerned? I mean, I don't know how the interview process is going to go for a position where you are calculating data. Yeah. You know, what would they say? How how would you have seen the September jobs? Oh, you would have seen a better labor. That myth. You're hired. You got the job. I don't know if that's going to make anybody feel any better either. That's also politicization in another way. I think that's right.

16:17Look, I think that job in particular is supposed to be a non-political. Even though it's a political appointee, it's stated that it's a statistics job, right? It's not meant to have political views. You're supposed to be taking a stand on the data. So I kind of like Mohamed El-Erian's discussion earlier today. He tweeted a bit, just we just need to get better at the data. Let's put some resources behind it. Let's get better at it. This is just, I think, more about a failure about getting these numbers right and looking at anybody's job performance. If you're having that many revisions, maybe it is time for a change.

16:52And I think that's a fair way to look at this one. David, I'm trying to look at catalysts for the market. When we look at the trade deals, 70 percent or thereabouts have been inked. Not that they've been finalized, but they've been inked. What are we looking for for the China deal? And when do you think that gets done? Best case scenario. And is that the next catalyst for the market? I mean, I think the secretary of the Treasury made it very clear this is happening fast. They're looking at the European deal. They're looking at the Japanese deal. And they're probably like, holy cow, that happened faster and more aggressively than we thought.

17:28And they need to make a move. So I think that's all going to happen relatively quick. But the question really is, how important is it for the market? Because the initial, you know, when we were back in April and we were here and the world was going crazy, you know, the impact was huge. And now it's just people are looking at this and going, OK, I get it. The whole idea was simple. He did the classic art of the deal. He came in and he said, I'm going to disrupt. I'm going to get everybody to the table. I'm going to make a deal. and I'm going to make a deal that's fair for the United States because I hold the cards.

18:03I hold the cards because we're more cooperative than our trading partners. So they have more to lose. Now, he took that bet. It could have gone wrong. It could have. But the bet was because they had more to lose, they'd come to the table and they'd give something up. And that looks like exactly what's happened. So I think the market is now conditioned to understand what the technique is so they don't get scared when the big numbers get thrown out. Even Switzerland, which was like almost 40 percent. I wouldn't be surprised if the Swiss are back at the table going, you know what, we have to figure out how to get this thing down.

18:30Like, OK, what do we need to do? And we're back at 15 or 20 before you know it, because they made some concessions. They did some investments. They did something. That's that's the deal. And I just don't think these are going to drive markets anything like what they drove in April. This is we're going to be driven by monetary policy. We're going to be driven by what changes in the as the one big, beautiful bill goes into enactment and the investment comes in. And we start to see that filtering through the data and the economic data. Tim has a question. So, David, let's. Yeah. Great to see you, but not be there, unfortunately.

19:06Sorry. But David, how about the market itself? Let's leave the politics alone. And I think we're all kind of tired of the politics. In fact, there are sectors that have been uninvestable either because of the politics or, frankly, they've been a, you know, they have also been at the risk of some of their own business models. But health care for sure, energy for sure. And so in terms of positioning, where do you think investors should be taking a shot here where either things are oversold? There's been nothing about this earnings season that should give us any pushback on the growth around AI. So, you know, to me, no matter what happened today, some of those themes are alive and well.

19:45But I'm curious where you are on positioning, because there's places that have been beaten up and there's places that have rallied. Well, as you know, Tim, I'm more of a macro guy. I don't take a lot of sectoral views, so you're not going to pin me down on that one. But here's one thing I will say on positioning, because I think positioning is really important here. I think a lot of people got out of a lot of risk in April, May, and they didn't get back in. And there's a whole subset of investors that have underperformed. And we're going to see redemption. We're going to see people lose their funds and lose their jobs in some ways.

20:23And those funds are going to go to those who stayed true to the idea that this was not a panic selling situation. And they're going to get more assets. And guess what they're going to do with those assets? They're going to drive them the same way they've been driving the assets all year. So my vision for the second half of the year is that we're going to have a bit of a transfer. As people withdraw and move toward those who have been in winning strategies to start the year, those folks are going to actually lose their assets, and you're going to get another leg up because that money is going to get invested.

21:01And I think it's going to get invested not just because they have that view and it was correct before, But actually, there's a lot of catalysts for that view to continue, meaning there's just great investment opportunities that come from what was just passed in Washington in terms of everything related to the one big, beautiful bill. But the other factor will be as we process lower interest rate environments into 26, 27 and possibly even 25, got a resignation today. I think that's going to push pressures on multiples higher. People go in and invest more. And you've been steadfast, even when you were here in April and things were crazy.

21:37You were like, no, things are going to turn out great. We're going to see a lot of catalysts coming forward. We've seen them play out. And so, you know, in terms of what the market has digested, we know a lot of that because you elaborated on them in April. And that's why we went to new highs. So at this point in time, what is that next driver? And how important is, let's say, you know, 50 basis points cut total by the end of the year versus 75 versus, I mean, Does that incrementally make you more bullish? Because it does seem, with Kugler stepping down, that potentially we have a better chance of getting faster and deeper rate cuts.

22:13I think that's right. I don't, I mean, it's hard to parse out why she left five months early. I mean, you know, I don't know the answers. Did she have disagreements with people on the committee? Was she just, you know, ready to go? Does she have a great job offer at a university? I don't know. But it certainly opens up more room for a board that is made up of Trump appointees. And presumably, Jay will leave at the end of his term in May, although he hasn't committed to that. And we'll have four out of seven seats that are really Trump appointees and will be a Trump board. So I think the market's focused on that.

22:52But the market knows that this sort of playing games of what we saw this week with the FOMC meeting, where it was the hawkish meeting and the tariffs are still an issue and we've got to be careful. And uncertainty, the code word for everything, uncertainty, makes everybody walk away. I actually don't. I hate this word uncertainty because there hasn't been that much uncertainty. In fact, volatility has been low. The VIX popped a little today, but it was 15. It's probably going to be 15 in a week when we're all back to normal. And bond volatility. Bond volatility is at its lowest level since 2021.

23:27So I think uncertainty is kind of code word for we don't really like the policies and we didn't really get the investment thing right. So we got to lean on that. I think once we get through this and we get a Fed that is more in touch with where policy is truly, which is restrictive, and is committed to bringing that down, you're going to get the next leg up. And that's a big part of the second half year. and 2026. What's the saying? Don't fight the Fed. So David, great to see you. Thank you. Always a pleasure. Coming up, Amazon's awful day, the tech giant, the worst performer in the Nasdaq 100 after earnings last night.

24:03What's next for this name and what it says about the state of the AI trade? Stay tuned.