The US stock market took another hit on Friday and managed to finish a disastrous week in the red as poor economic news coupled with weak earnings from some major tech players continued an alarming five-day collapse. The decline was itself heightened by recently-released non-farm payroll figures that showed a modest 114,000 jobs added to the economy in July (far below Wall Street analyst estimates of 175,000). The retreat has stoked worries about how sound the US economy truly is.

This market reaction comes few days after a stock indices rally due to an upbeat assessment of inflation by Federal Reserve Chair Jerome Powell, who indicated the Fed could potentially cut rates as early as September. But the latest payrolls data has re-ignited fears that the Federal Reserve may have kept interest rates too high for too long, throttling economic growth.

The markets are now coping with the reality that economic data might be deteriorating quicker than anyone expected in light of these imminent rate cuts. The consensus is immediate rate cuts may prove insufficient to offset the economic drag from a slowdown, given it takes between six and 12 months for such policy changes to play out.

Global Economic Signals Impact on Metals and Futures Markets

Commodities, there has been great divergences in response. Copper prices have been a little more resilient of late, however gloomy predictions for its fortunes by Chinese state-backed research house Antaike stated negativity growing in the manufacturing sector. Antaike forecasts a drop in Chinese copper demand growth to 2.3% this year from the prior year’s 5. Meanwhile, the copper market is expected to see a 300,000 ton global supply surplus.

In contrast, gold breached $2,500 per ounce for the first time ever. The new catalyst for gold rising, particularly December delivery hitting an all-time high of $2,522.50 has been the result of increased geopolitical tensions as well as fresh signals that economic conditions in US continue to deteriorate. The metal’s climb underscores its safe-haven allure during times of economic woe.

Silver went another way. At press time, silver also showed a 0.6 percent reduction to $28.35 an ounce as the fear of US recession is growing again and seems to be bullish towards the dollar by sending oil prices down.. This slide echoes concerns in the wider market over what lies ahead for the US economy and how that would effect some riskier financial assets.

Whilst the US economy charts its treacherous course, investors are keeping a keen eye on FOMC monetary policy & rate decisions and global economic growth momentum. The varied reactions from all sorts of asset classes illustrate the complicated dynamics markets must now grapple with in a more uncertain economic backdrop.