- Shares on Wall Street ended lower
- The 10-year reference yield reaches a two-week high
- The report on jobs in the United States exceeds expectations
- The US dollar index increases profits
- Oil prices are rising
NEW YORK, June 3 (Reuters) – Global stock markets fell as US government bond yields hit two-week highs on Friday after data showed the US economy generated more than expected jobs in May. signaling that the Federal Reserve is likely to continue to raise interest rates in an effort to curb inflation.
A carefully monitored Labor Department employment report shows that the U.S. economy added 390,000 jobs in May, with the unemployment rate remaining stable at 3.6 percent for the third month in a row, surpassing most analysts. Read more
Traders hoped the job report would reveal stronger signs of weakness in the US economy, which would help persuade the Fed to soften its stance on inflation and interest rates to avoid a recession.
Register now for FREE unlimited access to Reuters.com
I’m registering
“It has been a force in every area except retail, and the job-leading economy continues to grow,” said Josh Wayne, portfolio manager at Hennessy Funds in Chapel Hill, North Carolina. “Unfortunately, the Fed still has to destroy some of the demand, and they will continue to do so for at least the next few meetings with 50-point interest rate hikes.”
The global stock index MSCI (.MIWD00000PUS), which tracks stocks in 50 countries, fell 1.14%. The pan-European STOXX 600 index (.STOXX) fell 0.26%.
US Treasury yields rose to two-week highs after strong job data. The reference 10-year banknotes increased by 2.946%, while the interest-sensitive two-year banknotes increased by 2.6606%.
On Wall Street, all three major indexes closed lower, pushed down by sales in the sectors of technology, consumer judgment, communications services, finance and industry. 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.
“Some of the rally (in the shares) lately is due to the Fed’s recognition that in the fall they could reassess and perhaps pause. But the market is tracking some of its earlier losses and saying it’s generally not on the table, “said Wayne.
The US dollar rose against a basket of currencies after the employment report. The dollar index rose 0.393%, while the euro fell 0.25% to $ 1.0718. Read more
Oil prices have risen, supported by expectations that OPEC’s decision to increase production targets by slightly more than planned will not have much effect on limited global supply and growing demand as China eases restrictions on the COVID-19 pandemic. Read more
Brent crude rose 1.8 percent to $ 119.72 a barrel and US West Texas Intermediate crude rose 1.7 percent to $ 118.87. Both benchmarks rose more than $ 3 in after-hours trading.
Gold prices fell by nearly 1% after the attractiveness of bullion was hampered by the rise of the US dollar and the yield on government bonds after strong job 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.
Register now for FREE unlimited access to Reuters.com
I’m registering
Report by Chibuike Oguh in New York; edited by Jonathan Oatis and Will Dunham
Our standards: Thomson Reuters’ principles of trust.
Add Comment