Friday’s economic and geopolitical developments significantly increased selling pressure not just in crypto, but across traditional markets as well. U.S. stock indices also dropped sharply: the Dow fell 1.23%, the S&P 500 lost 1.6%, and the Nasdaq declined by 2.24%.

1. Weak Employment Data

The U.S. Bureau of Labor Statistics reported that only 73,000 jobs were added in July — well below expectations. Moreover, there was a downward revision of 258,000 jobs for May and June combined, indicating deeper labor market weakness than previously thought.

While the unemployment rate remained at 4.2%, the number of long-term unemployed rose by 179,000, reaching 1.8 million. The increase in the number of new job seekers also stood out. Markets interpreted this as a sign that the labor market deterioration is accelerating.

2. Strong Response from President Trump

President Donald Trump reacted swiftly to the labor data. In a public statement, he accused BLS Commissioner Erika McEntarfer of manipulating employment figures and ordered her immediate dismissal. This move strengthened perceptions that economic data is being politicized, shaking investor confidence.

3. Escalating Tensions with Russia

Later the same day, Trump announced that he had ordered two nuclear submarines to reposition in response to provocative statements from Russian officials. The lack of a prior statement from the Pentagon added to the unease. Investors interpreted this as a significant geopolitical risk, further pressuring risk assets.

Rate Cut Expectations Rise — But Confidence Doesn’t

Following the weak jobs data, many investors now expect the Federal Reserve to cut rates by 50 basis points in September. However, this anticipation did little to lift the markets.

That’s because rate cuts are no longer viewed as a proactive tool to stimulate growth. Instead, they are increasingly seen as a reaction to economic weakness — a signal that the downturn may already be underway. In this context, easing monetary policy failed to counter the growing fear of recession, especially in sectors like crypto that are highly sensitive to macro sentiment.

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