STOCK markets mostly fell worldwide on yesterday after data showed US employers added jobs at a better-than-expected pace last month, raising the prospect the Federal Reserve’s aggressive interest rate hikes will not be enough to contain inflation and avoid a recession.

Major Wall Street indices fell sharply, with the Nasdaq losing 2.5%, and were in the red for the week after a brief positive respite last week.

Paris and Frankfurt both closed slightly down. London’s FTSE 100 was closed for a holiday.

Oil prices, meanwhile, pushed higher, a day after the OPEC+ group of major oil producing nations led by Saudi Arabia and Russia agreed to raise output more than expected in the wake of a European Union ban on most Russian crude.

American employers added 390,000 jobs last month, a sign of a slowdown in hiring but still above forecasts amid a shortage of workers, according to the US Labor Department.

The jobless rate held steady at 3.6% for the third consecutive month.

The Fed has hiked interest rates to combat sky-high inflation, but investors worry that more aggressive moves could backfire and hamper economic growth.

The jobs report contained some positive news for the Fed: wage gains slowed in the month and more people returned to the workforce.

But the central bank has signalled big rate hikes are coming, and the increases are likely to continue through the end of the year, adding to investor worries about the economic outlook.

Worst is not over

“We are still in a bear market and until proven otherwise the path of least resistance is down,” Maris Ogg of Tower Bridge Advisors, told AFP.

She noted that major components of inflation are not improving.

“Oil is not going to get better, labour is not going to get better, housing is not going to get better. Housing and labour are in shortage,” she said. “As far as the stock market goes, I would be surprised if the worst is over.”

The European Central Bank has indicated it will raise interest rates in July for the first time in over a decade.

Tokyo’s stock market closed higher ahead of the US jobs report. Hong Kong and Chinese mainland indices were closed for holidays.

Among major companies, Tesla shares plunged 9.2% after the electric carmaker’s CEO Elon Musk told employees the company plans to cut the salaried workforce by 10% and rely on more hourly workers because he had a “super bad feeling” about the economy.

Elsewhere, Brent North Sea crude, the international benchmark, rose 3.2%, to US$121.31 a barrel.

Opec+ agreed on Thursday to ramp up output in July by 50% more than in previous months.

Key figures at around 2100 GMT

New York - Dow: DOWN 1.0% to 32,899.7 (close)

New York - S&P 500: DOWN 1.6% at 4,108.54 (close)

New York - Nasdaq:  DOWN 2.5% at 12,012.73 (close)  

Frankfurt - DAX: DOWN 0.2% at 14,460.09 (close)  

Paris - CAC 40: DOWN 0.2% at 6,485.30 points (close) 

EURO STOXX 50: DOWN 0.3% at 3,783.66 points 

London - FTSE 100: Closed for a holiday

Tokyo - Nikkei 225: UP 1.3% at 27,761.57 (close)

Hong Kong - Hang Seng Index: Closed for a holiday

Shanghai - Composite: Closed for a holiday

Brent North Sea crude: UP 3.2% at US$121.31 per barrel

West Texas Intermediate: UP 2.9% at US$120.36 per barrel

Euro/dollar: DOWN at US$1.0719 from US$1.0753 on Thursday

Pound/dollar: DOWN at US$1.2488 from US$1.2568

Euro/pound: UP at 85.81 pence from 85.49 pence.  – AFP, June 4, 2022.