Major U.S. indexes closed sharply lower Friday as investors reacted to a weaker-than-expected July jobs report, compounded by political firestorms over labor data integrity and a surge of attention around crypto ETFs. The Dow Jones Industrial Average dropped 542.40 points, or 1.23%, to 43,588.61. The S&P 500 lost 101.38 points, or 1.60%, to finish at 6,238.01, while the Nasdaq Composite tumbled 472.32 points, or 2.24%, to 20,650.1. All four major indexes, including the Russell 2000, ended the day deep in the red.

Tepid Payroll Growth Fuels Market Anxiety

The Labor Department reported that nonfarm payrolls rose by just 73,000 in July, extending a stretch of minimal job growth dating back to April. The unemployment rate held steady at 4.2%. Sectors such as healthcare and social assistance continued to show gains—adding 55,000 and 18,000 jobs respectively—while federal government employment declined by 12,000 positions.

In addition to the modest headline figure, revisions to prior months painted an even gloomier picture. Payroll gains for May and June were revised down by a combined 258,000 jobs, highlighting a growing pattern of overestimated employment gains.

President Donald Trump, in a post on Truth Social, blasted the Bureau of Labor Statistics (BLS) and its commissioner, Dr. Erika McEntarfer, calling for her immediate dismissal. “This is the same Bureau of Labor Statistics that overstated the Jobs Growth in March 2024 by approximately 818,000… We need accurate Jobs Numbers,” Trump wrote. “McEntarfer said there were only 73,000 Jobs added (a shock!) but, more importantly, that a major mistake was made by them, 258,000 Jobs downward, in the prior two months.” He went on to criticize the Federal Reserve, suggesting its pre-election rate cuts were politically motivated.

El-Erian Warns on Structural Issues in Jobs Data

Mohamed El-Erian, Chief Economic Advisor at Allianz, echoed some of the concerns about labor data quality but stopped short of attributing them to political bias. “These issues have been there for a long time and getting worse,” El-Erian said. “There has been a reasonable discussion about what we do for data collection… It’s just the nature of the exercise and the fact that the data collection tools have not evolved as fast as they need to evolve”.

Among key household survey metrics, the number of long-term unemployed rose by 179,000 to 1.8 million. The labor force participation rate held at 62.2%, while the employment-population ratio remained unchanged at 59.6%—both reflecting marginal declines over the past year. Average hourly earnings rose by 0.3% to $36.44, and the average workweek ticked up to 34.3 hours.

Crypto ETFs Gain Ground Amid Market Volatility

While equities stumbled, crypto markets captured renewed interest, buoyed by structural regulatory advances and bullish commentary from Wall Street insiders. Stephen McClurg, CEO of Canary Capital, outlined how new SEC-approved generic listing standards will make crypto ETFs as accessible as traditional funds like SPY.

“We’re entering an era where Bitcoin looks less like a niche experiment and more like a high-octane version of the Nasdaq,” McClurg told AInvest’s Adam Shapiro. He cited Bitcoin’s 150% gain over the past year and its increasingly tight correlation with equity markets, though with significantly higher beta. “Even though they’re moving in the same direction as equities, the beta is much higher,” he noted.

The GENIUS Act, recently signed into law, provides a federal framework for digital assets and is expected to accelerate adoption of stablecoins and protocol tokens. McClurg warned, however, that not all stablecoins are equal, pointing to the implosion of Terra Luna as a cautionary tale. He emphasized that U.S.-regulated tokens like Tether and USDC offer safer exposure through underlying short-term Treasuries.