LONDON: World stock markets mostly rose on Wednesday (Feb 11) as data showed US job growth beat expectations in January, reassuring investors about the outlook for the world’s top economy.
The US economy added 130,000 jobs last month, the Department of Labour said, nearly double the amount expected by analysts. Meanwhile, the jobless rate inched lower to 4.3 per cent.
Briefing.com analyst Patrick O’Hare said the jobs report “is a positive sign for the US growth outlook, yet it may come with the cost of foregoing an additional rate cut by the Fed, at least in the near future”.
He noted that yields on US government debt picked up after the report, indicating that investors see the chances for interest rate cuts diminishing.
The US dollar also moved higher following the release, also an indication that investors see the prospect that interest rates will remain higher.
Wall Street’s top stock indices moved higher at the start of trading on Wednesday.
European equity indices were mostly in the green, while Asia’s main stock markets closed higher before the US jobs report.
XTB research director Kathleen Brooks noted that the jobs data still raised concerns thanks to an annual revision that was also given on Wednesday – which showed a benchmark reduction of 862,000 positions.
“The revisions suggest there was virtually no jobs growth in the US last year,” she said.
The jobs figures follow a spate of weak economic data, the latest of which was sales reading on Tuesday that analysts said provided the Fed with room to consider cutting borrowing costs next month, having held in January after three reductions in a row.
However, it also indicated there was unease among American consumers, who are the major driver of growth, and pointed to further weakness in the economy.
Traders also remain on guard about developments in the tech space as they worry that the hundreds of billions firms have pumped into artificial intelligence may not see any returns for some time.
That was compounded on Tuesday after Google’s parent Alphabet raised more than US$30 billion in debt in less than 24 hours as it looks to ramp up its capabilities.
News that the start-up Altruist Corp had rolled out a tax-strategy tool added to the sense of unease on trading floors, as it fanned concerns that the software will take business from mainstream firms.
In Europe on Wednesday, shares in Heineken climbed 3.7 per cent after the Dutch brewer said it would axe 6,000 jobs amid falling beer shipments.
TotalEnergies rose 1.8 per cent as the French energy giant announced fresh share buybacks, helping offset news of a 17 per cent drop in annual net profit.
Siemens Energy shares jumped 7.8 per cent on ballooning profits as AI boosts demand for electricity.
On the downside, Dassault Systemes tumbled more than 21 per cent after the French software group posted lower sales than expected.
World crude prices meanwhile rose on fresh Middle East tensions, with Israeli Prime Minister Benjamin Netanyahu expected on Wednesday to push US President Donald Trump to take a tougher stance in nuclear talks with Iran.