- Wall Street shares end lower
- 10-year benchmark yields reach a maximum of two weeks
- The May employment report in the United States exceeds expectations
- The US dollar index widens gains
- The price of oil goes up a lot
NEW YORK, June 3 (Reuters) – Global equity markets plummeted as US Treasury yields hit a two-week high on Friday after data showed the U.S. economy was generating a more jobs than expected, indicating that the Federal Reserve is likely to continue. raise interest rates in their efforts to curb inflation.
The closely watched Department of Labor employment report showed that the U.S. economy added 390,000 jobs in May, with the unemployment rate remaining stable at 3.6% for the third month. consecutive, surpassing most analysts ’estimates. Read more
Traders hoped the jobs report would show stronger signs of weakness in the U.S. economy that would help persuade the Fed to soften its position on inflation and interest rates to prevent it from triggering a recession.
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“It was a general strength, with the exception of retail, and the economy on the employment front continues to advance,” said Josh Wein, portfolio manager at Hennessy Funds in Chapel Hill, North Carolina. “The Fed, unfortunately, still needs to destroy some demand and will continue to do so at least during the next meetings with 50-point rate hikes.”
The MSCI Global Equity Index (.MIWD00000PUS), which tracks stocks in 50 countries, fell 1.14%. The pan-European STOXX 600 index (.STOXX) was down 0.26%.
U.S. Treasury yields rose to a two-week high after strong employment data. 10-year benchmark notes rose to 2.946%, while rate-sensitive two-year notes rose to 2.6606%.
On Wall Street, the top three indices closed lower, driven by sales in the technology, consumer discretionary, communications services, financial and industrial 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 (equity) rebound lately has been due to the Fed acknowledging that in the fall they could reassess and pause maybe. But the market is going through some of its previous losses and basically saying that this is off the table “. said Wein.
The US dollar rose slightly against a basket of currencies after the employment report. The dollar index rose 0.393%, and the euro fell 0.25% to $ 1.0718. Read more
Oil prices rose, driven by expectations that OPEC’s decision to increase production targets slightly more than expected will not affect much adjusted global supply and rising demand as demand rises. China eases restrictions related to the COVID-19 pandemic. Read more
Brent crude rose 1.8% to $ 119.72 a barrel, and US crude West Texas Intermediate rose 1.7% to $ 118.87. Both benchmarks rose more than $ 3 in out-of-hours trading.
Gold prices fell nearly 1% after bullion attractiveness was hit by the rising US dollar and Treasury yields following strong employment data.
Cash gold fell 0.9% to $ 1,850.57 an ounce, while U.S. gold futures fell 0.99% to $ 1,848.10 an ounce.
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Report by Chibuike Oguh in New York; edited by Jonathan Oatis and Will Dunham
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