LONDON, March 8 — US stock markets rose slightly today as investors digested a jobs report showing that hiring in the United States was higher than expected last month.
Non-farm payrolls rose 275,000 in February, higher than the consensus forecast of 200,000.
Stock futures initially fell on the news, which seemed to suggest the economy is running too hot to justify the Federal Reserve easing its monetary stance.
But the report also included downward revisions to previous months, as well as rise in the unemployment rate to 3.9 per cent from 3.7 per cent.
Shortly after their opening, all major Wall Street indexes were slightly higher.
“The key takeaway from the report, accounting for the fresh data and the revised data, is that it fits the soft landing/no landing narrative that is integral for a positive earnings growth outlook,” said Patrick O’Hare, an analyst at Briefing.com.
“In that regard, then, it has provided some validation for the stock market’s run to record highs.”
Wall Street had reached all-time highs Thursday, lifted by Federal Reserve boss Jerome Powell hinting at a more dovish tilt to monetary policy coming soon.
But in his testimony to lawmakers, he also insisted the Fed needed to see more signs of winning the battle against inflation before making a move.
“Overall, this was a weak jobs report, despite the headline beat,” said Fawad Razaqzada, analyst at FOREX.com. “The Fed is now more likely to cut rates in June.”
In Europe, Paris and Frankfurt were up slightly at mid-afternoon, but London was down.
Paris and Frankfurt also hit record highs yesterday after European Central Bank chief Christine Lagarde hinted at cuts to eurozone interest rates starting in June.
The Fed and the ECB have jacked up interest rates to combat the inflation that spiked after Russia invaded Ukraine. Inflation rates have slowed, but are still above the central banks’ targets.
But the higher rates have risked pushing countries into recession, particularly in Europe.
Official data today showed German industrial production rose for the first time in nearly a year in January, fuelling hopes that a manufacturing slowdown in Europe’s biggest economy was bottoming out.
The US stock market has gained around 10 per cent so far this year, driven higher by tech stocks, but they have started to diverge in recent weeks.
Chipmaker Nvidia is up 92 per cent from the start of the year and Facebook owner Meta is up 48 per cent, but Apple is down nine per cent.
Another major stock, electric carmaker Tesla, has lost 28 per cent.
“It’s quite obvious that some differentiation is coming back into the market,” said David Morrison, senior market analyst at Trade Nation.
Expectations of lower US interest rates continued to drag the dollar lower and boost gold, which today hit a new summit at US$2,171.38 (RM10,187) an ounce. — AFP
