Global Stocks Rise on US Jobs Data Cooling Fed Rate Hike Fears: What Investors Need to Know
Global stock markets extended their gains on Friday following a softer-than-expected US jobs report, which tempered expectations of an imminent Federal Reserve interest rate hike. Additionally, regional activity indicators pointed to economic expansion in June.
Europe’s broadest equity index, the STOXX 600, reached a record high of 651.77 before settling at 650.29, marking its strongest weekly performance in over a month. Germany’s DAX index rose 0.4 percent, while France’s index remained steady and the UK’s slipped by 0.2 percent. Meanwhile, MSCI’s broad global equity index increased by 0.4 percent.
Dan Coatsworth of investment platform AJ Bell noted, “Europe’s Stoxx 600 ended the week with a bang as investors lapped up utilities, industrials, and basic materials stocks.” He added a note of caution, saying, “While these movements imply a more upbeat investor, it’s important to keep watching US tech stocks, as many are losing momentum.”
In Asia, South Korea’s Kospi index fluctuated but ultimately closed approximately 6 percent higher, buoyed by strong buying interest in struggling semiconductor companies. Purchasing Managers’ Index (PMI) data released on Friday pointed to growing economic activity across the region. Japan’s services sector returned to expansion in June after stalling the previous month, while China’s services sector grew at a slightly slower pace, with overseas demand rising at the fastest rate in 20 months.
Analysts from Capital Economics commented on the Chinese data, stating, “The PMIs remain healthy by recent standards and still imply stronger economic momentum across Q2 as a whole.”
US job growth slowed markedly in June, with payroll gains for the previous two months revised downward, indicating a cooling labor market. This subdued jobs report diminished expectations for a near-term rate hike and increased the likelihood that the Fed will maintain current rates until October. Fed funds futures show a 46.8 percent probability that the Fed will keep rates steady at its September 15-16 meeting, up from 35.8 percent the previous day, according to CME Group’s FedWatch tool.
James Rossiter, head of global economics at TD Securities, highlighted shipping as a key risk for the year. He explained, “Ships have been rerouted all over the world because of the Hormuz Strait closure, leading to reduced shipping capacity globally,” with price effects still reverberating through the global economy.
US futures remained positive despite the US market being closed on Friday for Independence Day, with S&P 500 and Nasdaq futures rising 0.3 percent and 1.1 percent, respectively.
The US dollar held steady against the yen around 161 yen, retracting earlier gains amid lower market liquidity due to the holiday and cautious trader sentiment. The Japanese yen has experienced volatility this week following reports that authorities may have adopted a new approach to market intervention.
The US dollar index, which tracks the greenback against a basket of six currencies, edged down 0.2 percent to 100.76.
In commodities, Brent crude futures stabilized at $71.75 per barrel. Gold prices rose by just over 1.3 percent to $4,178. Bitcoin also showed a slight increase of 0.1 percent, reaching $62,090.78.
— رويترز
تحليل خاص من عمانت | تصفح سوق عُمان
The global macroeconomic landscape signals a cautious yet optimistic outlook as softer US job growth dampens immediate rate hike fears, while expanding regional PMIs indicate sustained economic momentum, particularly in Asia and Europe. For businesses in Oman, this environment offers opportunities to leverage stabilizing commodity prices and growing external demand, but also necessitates vigilance around geopolitical risks affecting shipping routes. Smart investors and entrepreneurs should consider diversifying portfolios and exploring sectors linked to basic materials and utilities, while monitoring global inflation trends and supply chain disruptions for strategic decision-making.
