Stock market today: Global markets mostly stumble following hotter-than-expected US jobs report
What was the impact of the hotter-than-expected U.S. jobs report on global stock markets?
The hotter-than-expected U.S. jobs report had a mixed impact on global stock markets. Following the release of the report, which showed that U.S. employers added 272,000 jobs in May, world stocks were mostly lower. The strong jobs market has supported consumer spending and the broader economy, but it has also complicated the Federal Reserve's path ahead for interest rates.
In Europe, the CAC 40 in Paris sank 1.7% to 7,866.87, and Germany’s DAX lost 0.7% to 18,425.26. Britain’s FTSE 100 declined 0.4% to 8,215.84 in early trading. The future for the S&P 500 shed 0.1% and that for the Dow Jones Industrial Average was down 0.2%.
In Asia, markets ended mixed. In Tokyo, the Nikkei 225 index rose 0.9% to 39,038.16 after government data on Monday showed Japan’s economy contracted at an annualized 1.8% pace in January-March, an upward revision from the previously announced 2% drop. South Korea’s Kospi slipped 0.8% to 2,701.17.
Markets in China, Hong Kong, Australia, and Taiwan were closed for holidays.
The yield on the 10-year Treasury jumped to 4.43% from 4.29% just before the jobs report was released. The two-year yield, which more closely tracks expectations for the Fed, jumped to 4.89% from 4.74% prior to the report's release.
Investors took even more bets off the table that the Fed would cut rates at its July meeting, according to data from CME Group. Wall Street has also been monitoring earnings from retailers, which have shown that customers have been pulling back on items that aren’t essentials. Consumer spending has been the main support for the economy, but stubborn inflation is hurting consumers, especially those with lower incomes.
What were the specific effects of the U.S. jobs report on the yields of the 10-year and 2-year Treasury notes?
The U.S. jobs report caused the yields of the 10-year and 2-year Treasury notes to increase. The yield on the 10-year Treasury jumped to 4.43% from 4.29%, and the two-year yield, which more closely tracks expectations for the Fed, jumped to 4.89% from 4.74%. This increase in yields indicates that investors are expecting higher interest rates in the future due to the strength of the job market and the complications it brings to the Federal Reserve's path for interest rates5.
How did the euro react to French President Emmanuel Macron's decision to dissolve the National Assembly?
The euro fell to its lowest price in nearly a month after French President Emmanuel Macron dissolved the National Assembly following a setback in Sunday's parliamentary election. Far-right parties made significant gains in the elections, leading Macron to call a snap election. The euro was trading at $1.0766, down from $1.0778. This drop in the euro's value reflects the uncertainty and potential political instability resulting from the electoral setback for Macron's party.