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Global stock markets fall, US yields rise after strong jobs data

  • Wall Street stocks end lower
  • Benchmark 10-year yields hit two-week high
  • May US jobs report beats expectations
  • US dollar index extends gains
  • Oil prices rise slightly

NEW YORK, June 3 (Reuters) – Global stock markets tumbled as U.S. Treasury yields hit two-week highs on Friday after data showed the U.S. economy generated a number of jobs. higher than expected in May, signaling that the Federal Reserve is likely to continue raising interest rates as part of its efforts to curb inflation.

The Labor Department’s closely watched jobs report showed the U.S. economy added 390,000 jobs in May, with the unemployment rate holding steady at 3.6% for a third straight month, beating most public estimates. analysts. Read more

Traders hoped the jobs report would reveal stronger signs of weakness in the US economy that would help persuade the Fed to ease its stance on inflation and interest rates to avoid triggering a recession.

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“It was a strength across the board except retail, and the economy on the jobs front continues to grow,” said Josh Wein, portfolio manager at Hennessy Funds in Chapel Hill. , North Carolina. “The Fed unfortunately still has to destroy demand a bit and it will continue to do so for at least the next few meetings with rate hikes of 50 points.”

The MSCI World Equity Index (.MIWD00000PUS), which tracks stocks from 50 countries, fell 1.14%. The pan-European STOXX 600 index (.STOXX) fell 0.26%.

US Treasury yields hit two-week highs after strong jobs data. Benchmark 10-year bonds rose to 2.946%, while two-year rate-sensitive bonds rose and rose to 2.6606%.

On Wall Street, all three major indexes closed lower, pushed lower by selloffs in the technology, consumer discretionary, communication services, financials and industrials sectors. Read more

The Dow Jones Industrial Average (.DJI) fell 1.05% to 32,899.7, the S&P 500 (.SPX) lost 1.63% to 4,108.54 and the Nasdaq Composite (.IXIC) fell 2.47% to 12,012.73.

“Part of the rally (in stocks) of late was due to the Fed recognizing that in the fall it might reassess and perhaps take a break. But the market is retracing some of its earlier losses and basically says it’s all irrelevant,” Wein said.

The US dollar edged higher against a basket of currencies after the jobs report. The dollar index rose 0.393% as the euro fell 0.25% to $1.0718. Read more

Oil prices stabilized higher, supported by expectations that OPEC’s decision to raise production targets by a little more than expected will not affect tight global supply much and by the increase in demand as China eases COVID-19 pandemic restrictions. Read more

Brent crude rose 1.8% to $119.72 a barrel and U.S. West Texas Intermediate crude rose 1.7% to $118.87. Both benchmarks rose more than $3 in after-hours trading.

Gold prices fell nearly 1% after bullion’s appeal was shaken by the rise in the US dollar and Treasury yields following strong jobs data.

Spot gold fell 0.9% to $1,850.57 an ounce, while US gold futures fell 0.99% to $1,848.10 an ounce.

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Reporting by Chibuike Oguh in New York; edited by Jonathan Oatis and Will Dunham

Our standards: The Thomson Reuters Trust Principles.

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