$1.1 Trillion Market Wipeout After Trump Fires Top Data Official

U.S. stocks suffered a blow on August 1, losing $1.1 trillion in value after President Donald Trump reportedly fired the head of the Bureau of Labor Statistics, Erika McEntarfer. The decision came hours after a disappointing July jobs report.

Markets plunge across the board

All three major stock indices plunged by the end of Friday’s session. The Dow Jones Industrial Average sank more than 500 points, or 1.2%, while the S&P 500 dropped 1.6%. The tech-heavy Nasdaq Composite fell the hardest, shedding 2.2%. It was the worst single-day loss in months, capping off a week where all three indices declined by more than 2%.

Analysts pointed to a mix of disappointing employment data, tariff anxiety, and mounting distrust in economic institutions as drivers of the sell-off. Kiran Nair, chief economist at Lockridge Capital, said:

Markets can tolerate bad news. What they can’t tolerate is chaos at the top.

The jobs report that led Trump to firing

At the center of the storm was the BLS’ July jobs report, which showed the U.S. added only 79,000 jobs, well below economist expectations of 104,000. The numbers stoked fears that Trump’s escalating trade tariffs, particularly those targeting key allies like Canada, Switzerland, and South Korea, were beginning to hit domestic employment.

Trump quickly seized on the report as politically motivated. In a post, he accused the BLS of releasing “rigged numbers” designed to damage his reputation and undermine Republican momentum ahead of the November midterms. Hours later, reports surfaced that Erika McEntarfer, who had led the agency since 2023, had been fired.

Critics sound the alarm

Trump’s move to oust McEntarfer triggered immediate backlash from economists, policymakers, and former officials on both sides of the aisle. Larry Summers, former Treasury Secretary under George W. Bush, issued a scathing rebuke.

Firing the head of a key government agency because you don’t like the numbers they report is what happens in authoritarian countries, not democracies.

Others warned that tampering with statistical agencies could erode public trust and damage investor confidence, especially in global markets that rely on the integrity of U.S. economic data.

While the White House has not confirmed McEntarfer’s dismissal, insiders say an official announcement could come early next week. Meanwhile, all eyes are now on the Federal Reserve and its next move amid a storm of political pressure, economic uncertainty, and market volatility.