Global stocks drop again as traders await US payrolls data

Global stocks were poised to continue their decline as traders awaited this week’s U.S. payrolls data to assess the potential impact on Federal Reserve policies.

The Euro Stoxx 50 futures fell 0.2% while US equity contracts also dipped. The MSCI Asia Pacific Index erased most of its 0.8% gain, led by declines in Japan and Hong Kong, News.Az reports citing foreign media.

Treasury yields climbed after the 10-year rate dropped eight basis points in the prior session, as a slowdown in the US labor market bolstered bets on steep rate cuts by the Fed. An index of dollar strength steadied after weakening by 0.3% on Wednesday. The yen strengthened following an increase in Japan’s real wages that supported the case for the Bank of Japan’s rate hike.

Traders are back in wait-and-see mode ahead of the US payrolls report due Friday, one of the most important data points before the Fed’s decision later this month. Financial markets have displayed outsized reactions to US economic data as focus shifts to the risk of a recession. Skepticism over the artificial intelligence hype has also hurt risk assets, with Nvidia Corp. seeing its worst two-day plunge since October 2022.

Shares of Nippon Steel Corp. swung between gains and losses. The Japanese steelmaker is in focus after US President Joe Biden was said to block its $14.1 billion takeover of United States Steel Corp. US Steel closed 17% lower in New York, the biggest decline since April 2017.

Sentiment remains weak over Chinese equities. JPMorgan Chase & Co. dropped its buy recommendation for the nation’s stocks, citing weak policy support and potential volatility linked to the US presidential election. A gauge of Chinese shares in Hong Kong slumped to its lowest since mid-August.

News.Az