Global stocks fell on Tuesday, alongside a second consecutive decline in U.S. 10-year Treasury yields, as investors assessed mixed signals from the latest U.S. labor market data. Meanwhile, oil prices plunged amid concerns over oversupply, fueled by growing optimism about a potential peace agreement between Russia and Ukraine.
A report from the U.S. Department of Labor showed that nonfarm payrolls increased by 64,000 jobs last month, while the unemployment rate rose to 4.6%. The data pointed to a recovery from the previous month’s job losses, which were impacted by the exit of more than 150,000 government employees under deferred buyout programs as part of efforts to shrink the federal workforce. However, the prolonged government shutdown distorted the figures, casting doubt on their accuracy and adding to uncertainty over what they signal for the U.S. economic outlook and the Federal Reserve’s policy path following its recent interest rate cut.
Analysts described the jobs report as “neither weak nor strong,” noting that soft wage growth and slower hiring raised hopes for further rate cuts, while the return to job growth supported arguments for keeping interest rates unchanged. This divergence reflects ongoing market uncertainty over how many rate cuts may lie ahead.
On Wall Street, U.S. stock indices closed mixed, with the Dow Jones Industrial Average and the S&P 500 posting losses, while the Nasdaq recorded modest gains. Globally, the MSCI World Index declined, as did European stocks, following earlier losses in Asian markets where some indices fell to their lowest levels in weeks.
Investors are now turning their focus to upcoming U.S. inflation data, along with key monetary policy decisions from major central banks, including the Bank of England, the European Central Bank, and the Bank of Japan, as markets assess their potential impact on asset prices.
In bond markets, U.S. Treasury yields declined following the unexpected rise in the unemployment rate, although analysts cautioned that the data may be less reliable than usual due to distortions caused by the government shutdown. Yields on 10-year and long-term Treasuries fell, while two-year yields—closely tied to interest rate expectations—also moved lower.
In currency markets, the U.S. dollar edged slightly lower against a basket of major currencies, weakened against the Japanese yen, and traded largely flat against the euro. Sterling, meanwhile, rose despite data showing Britain’s unemployment rate at its highest level in several years and weak private-sector wage growth.
In cryptocurrency markets, Bitcoin rebounded, recovering part of its recent losses, supported by a modest improvement in risk appetite.
In commodities, oil prices extended their sharp decline, with Brent crude falling below $60 per barrel for the first time in months, hitting multi-year lows amid mounting concerns over global oversupply. The drop came as expectations grew that sanctions on Russia could be eased if a political settlement is reached, potentially increasing supply. U.S. crude prices also fell sharply.
By contrast, gold prices were largely steady, helped by the dollar’s pullback, while some investors bet that the rise in unemployment could strengthen the case for additional U.S. rate cuts, providing medium-term support for the precious metal.
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