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 increases in borrowing costs.
The blue-chip S&P 500 rose 0.1 percent, while the technology-heavy Nasdaq Composite fell 0.3 percent. In Europe, the regional Stoxx Europe 600 rose by 1.8 percent.
The US dollar index, which tracks the currency against six major companies, fell 1.6 percent. The move came after Susan Collins and Thomas Barkin, heads of the Boston and Richmond Fed branches, respectively, said the central bank should begin to consider a reduction in rate hikes.
Investors also scrutinized data showing the U.S. added 261[ads1],000 jobs in October, beating Wall Street expectations of 200,000. However, the unemployment rate rose 0.2 percentage points to 3.7 percent in October, higher than the 3.6 percent that was estimated.
Wages, meanwhile, rose 0.4 percent from the previous month, the report showed – higher than the forecast for a 0.3 percent increase.
Quincy Krosby, global chief 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 stock market” because higher unemployment numbers suggested wages were “shifting lower but not collapsing.” “.
The Fed implemented its fourth consecutive 0.75 percentage point interest rate hike on Wednesday as it tries to bring inflation down to its 2 percent target. Powell’s warning that recent data suggest “the final level of interest rates will be higher than expected” sent US stocks lower and led to a sharp jump in US short-term Treasury yields.
The yield on the two-year Treasury note, which is particularly sensitive to short-term expectations about 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 point to 4.67 percent on Friday.
Chinese stocks rose, extending their weekly gains on hopes that Beijing would change its long-standing zero-Covid policy. The CSI 300 index of Shanghai- and Shenzhen-listed shares rose 3.3 percent.
Industrial metal prices soared on the news. Combined with a weaker dollar, some key commodities were heading for historic daily gains.
Copper, a barometer of the health of the global economy, rose 6.5 percent to reach $8,000 a tonne for the first time in two months. Other base metals nickel, zinc and tin also rose more than 5 percent after falling since March as macroeconomic fears trumped supply worries.
Gold rose 2.8 percent to $1,677 a troy ounce, putting it on course for its best day since March when the conflict between Russia and Ukraine rocked global markets.
It also led to gains for mining groups Anglo American, up 11 percent, and Rio Tinto, up 8 percent in London. The FTSE 100 rose 2 percent.
Reports that US regulators had completed a review of Chinese audit reports earlier than expected added to investor optimism around Chinese shares, with Hong Kong’s Hang Seng closing up 5.4 percent.