Hard Landing Concerns Jolt Global Markets

The markets are growing more concerned about the slowing growth and an uncertain labor market.Credit…Jeenah Moon/Getty Images

Slowdown fears

Global markets are a blur of red on Friday as investors fret that the U.S. economy is heading for a slowdown.

Lackluster tech earnings are weighing on sentiment (more on that below), but the bigger worry is a softening jobs market and a spending pullback by consumers that threatens to crimp corporate profit.

That shines a spotlight on Friday’s jobs report, scheduled for release at 8:30 a.m. Eastern, and bolsters calls on the Fed to lower interest rates at its next meeting, in September.

There’s even talk that the central bank could consider a jumbo half-percentage-point rate cut to pull off its hope for a soft landing in which inflation is cooled without tipping the economy into recession.

Here’s the latest:

• S&P 500 futures were pointing to another weak open. That’s after the benchmark index fell 1.4 percent on Thursday as investors dumped stocks in favor of less risky assets like Treasury notes.

• The sell-off was broad, with the Russell 2000, a larger collection of U.S. stocks, falling 3 percent on Thursday, its worst decline since February.

• Stocks in Asia and Europe fell on Friday as investors worry that a U.S. contraction could ripple across the globe. Japanese equities, which had been one of the best-performing assets so far this year, have suffered their worst two-day drop since the 2011 tsunami.

What to watch on Friday: The payroll report is expected to show that employers added 175,000 jobs in July, with the unemployment rate staying at 4.1 percent. Thursday’s closely watched jobless claims data showed how antsy the markets have become about the deteriorating jobs market: The S&P 500 fell sharply after the data showed the largest spike in workers filing for unemployment benefits in nearly a year.