U.S. stocks faltered and the dollar fell on Friday after a mixed report on the nation’s labor market and a duo of senior Federal Reserve officials backed a slower pace of rising U.S. costs loans
The blue-chip S&P 500 rose 0.1%, while the tech-heavy Nasdaq Composite fell 0.3%. In Europe, the regional Stoxx Europe 600 added 1.8 percent.
The US dollar index, which tracks the currency against six major peers, fell 1.6 percent. The move came after Susan Collins and Thomas Barkin, the heads of the Fed’s Boston and Richmond branches, respectively, said the central bank should begin to consider a slowdown in raising interest rates.
Investors also looked at data showing the US added 261,000 jobs in October, beating Wall Street expectations of 200,000. The unemployment rate, however, rose 0.2 percentage points to 3.7 percent in October, higher than the 3.6 percent expected.
Meanwhile, wages rose 0.4 percent from the previous month, the report showed, more than the 0.3 percent expected.
Quincy Krosby, chief global strategist at LPL Financial, said the jobs report bolstered the case for a smaller 0.5 percentage point hike at the Fed’s December meeting and “helped the market of equity” because the higher unemployment figures implied that the payroll figures were “turning lower but not collapsing”. “.
The Fed implemented its fourth consecutive 0.75 percentage point rate hike on Wednesday as it tries to reduce inflation to its 2% target. Powell’s warning that recent data suggests “the final level of interest rates will be higher than expected” sent US stocks lower and led to a sharp jump in government bond yields in US short term.
The two-year Treasury yield, particularly sensitive to expectations of near-term monetary policy, fell from Thursday’s peak, when it hit its highest level since mid-2007. The yield on the note fell 0 .03 percentage points to 4.67 percent on Friday.
Chinese shares soared, extending their weekly gains on hopes that Beijing would reverse its long-standing zero-Covid policy. The CSI 300 index of shares traded in Shanghai and Shenzhen gained 3.3 percent.
Industrial metals prices soared on the news. Combined with a weaker dollar, some key commodities were on track for historic daily gains.
Copper, a barometer of the health of the global economy, rose 6.5 percent to surpass $8,000 a tonne for the first time in two months. Other base metals nickel, zinc and tin also rose more than 5% after falling lower since March as macroeconomic fears outweighed supply concerns.
Gold gained 2.8 percent to $1,677 a troy ounce, setting it on course for its best day since March, when the conflict between Russia and Ukraine rocked global markets.
That also spurred gains for mining groups Anglo American, up 11%, and Rio Tinto, up 8% in London. The FTSE 100 rose 2 percent.
Reports that U.S. regulators had completed a review of Chinese audit reports earlier than expected boosted investor optimism around Chinese stocks, with the Hang Seng in Hong Kong closing up 5, 4 percent.