U.S. stocks faltered and the dollar slid on Friday after a mixed report on the country’s labor market and a duo of senior Federal Reserve officials supported a slower pace of rising borrowing costs.
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 gained 1.8%.
The US dollar index, which tracks the currency against six major peers, fell 1.6%. The move came after Susan Collins and Thomas Barkin, heads of the Fed’s Boston and Richmond branches respectively, said the central bank should start considering a slowdown in its interest rate hike.
Investors also looked at data showing the United States added 261,000 jobs in October, beating Wall Street expectations of 200,000. The jobless rate, however, rose 0.2 percentage points to 3 .7% in October, which is higher than the 3.6% forecast.
Wages, meanwhile, rose 0.4% from the previous month, according to the report, which is higher than the 0.3% increase expected.
Quincy Krosby, chief global strategist at LPL Financial, said the jobs report strengthens the case for a 0.5 percentage point lower rise at the December Fed meeting and ” helped the stock market” because the higher unemployment numbers meant payroll numbers were “falling but not collapsing.” ”.
The Fed implemented its fourth consecutive 0.75 percentage point hike on Wednesday as it tried to bring inflation back to its 2% target. Powell’s warning that recent data suggests “the ultimate level of interest rates will be higher than expected” sent US stocks tumbling and leading to a sharp rise in short-term US government bond yields.
The two-year Treasury yield, which is particularly sensitive to short-term monetary policy expectations, has fallen since its peak on Thursday, when it hit its highest level since mid-2007. The yield on the note fell 0.03 percentage points to 4.67% on Friday.
Chinese stocks soared, extending their weekly gains on hopes that Beijing would alter its longstanding zero-Covid policy. The CSI 300 index of stocks listed in Shanghai and Shenzhen gained 3.3%.
Industrial metal 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% to top $8,000 a tonne for the first time in two months. Other base metals nickel, zinc and tin also jumped more than 5% after falling since March as macro fears overtook supply concerns.
Gold gained 2.8% to $1,677 per troy ounce, putting it on track since March when the Russia-Ukraine conflict rocked global markets.
It also boosted earnings at mining groups Anglo American, up 11%, and Rio Tinto, up 8% in London. The FTSE 100 rose 2%.
Reports that US regulators had completed a review of Chinese audit reports ahead of schedule boosted investor optimism about Chinese stocks, with the Hang Seng in Hong Kong closing up 5.4% .