(Reuters) – The S&P 500 was set to pull back from near six-month highs on Friday as data showed a sharp slowdown in U.S. employment growth and President Donald Trump cranked up friction with Beijing with moves to ban WeChat and TikTok.

The Labor Department’s closely watched report showed nonfarm payrolls increased by 1.76 million in July. While that was better than the 1.6 million that economists surveyed by Reuters had forecast, it was still sharply lower than a record 4.8 million in June.

“There’s a lot of anxiety coming into this jobs report so the prospect that the recovery hasn’t stalled out is certainly very welcome news,” said Yung-Yu Ma, Chief Investment Strategist at BMO Wealth Management in Portland, Oregon.

“(But) the data is still backwards looking, so it’s not something we can necessarily believe is the all-clear sign. There’s definitely still challenges ahead.”

Underlining the disconnect between U.S. economic health and a stimulus-led rally on Wall Street, the Nasdaq closed on Thursday above 11,000 for the first time and the S&P 500 finished about 1% below its record high as traders counted on Congress to agree another coronavirus relief package.

But Democratic leaders and Trump’s top aides have so far failed to make substantial progress, with differences partly centered around continuing an extra $600-per-week in unemployment benefits.

Meanwhile, Trump late on Thursday unveiled sweeping bans on U.S. transactions with the Chinese owners of messaging app WeChat and video-sharing app TikTok. In response, China said the companies complied with U.S. laws and warned that Washington would have to “bear the consequences” of its action.

Shares of WeChat-owner Tencent Holdings Ltd (0700.HK) fell as much as 10% in Asia trade, while New York-listed Tencent Music Entertainment Group (TME.N), which was spun off from Tencent in 2018, fell 5.7% in U.S. premarket trading.

Microsoft Corp (MSFT.O), which is seeking to buy TikTok’s U.S. operations, was down about 0.6%.

At 8:49 a.m. ET, Dow e-minis 1YMcv1 were down 50 points, or 0.18%, S&P 500 e-minis EScv1 were down 10 points, or 0.3%, and Nasdaq 100 e-minis NQcv1 were down 45.25 points, or 0.4%.

With the second-quarter corporate earnings season largely over, about 83% of S&P 500 companies that have reported so far have beaten dramatically lowered estimates, with earnings on average coming in 23.5% above expectations – the highest on record.

Goldman Sachs (GS.N) inched higher even as it cut its previously stated quarterly earnings, having set aside more money to pay for its settlement with the Malaysian government over the multi-billion 1MDB scandal.

T-Mobile US Inc (TMUS.O) rose 5% as it added more-than-expected monthly phone subscribers and said it had overtaken rival AT&T Inc (T.N) as the second-largest U.S. wireless provider. AT&T dipped 0.1%.

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