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Global stock markets rise, US yields fall ahead of jobs data

  • Wall Street stocks close higher
  • Benchmark 10-year rates down
  • Brent price up 1%
  • US dollar calms down
  • Safe haven gold exceeds 1%

NEW YORK, June 2 (Reuters) – Global stock markets rose as U.S. yields fell on Thursday after weaker-than-expected private payroll data raised hopes the U.S. economy was likely cooling and that the Federal Reserve might be persuaded to change its aggressive stance on interest rates and inflation.

The ADP’s National Jobs Report showed Thursday that private sector payrolls rose by 128,000 jobs in May, well below the consensus estimate of 300,000 jobs and suggested that demand for labor was starting to slow down. Read more

If the private payroll data is confirmed by the Labor Department’s fuller jobs report on Friday, the Fed is unlikely to continue its pace of rate hikes, said Sandy Villere, portfolio manager at Villere. & Co in New Orleans.

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“Essentially, bad news is good news and good news is bad news. That means the economy maybe cooling down a bit and maybe the Fed can ease into its hikes because that’s basically controlling everything right now,” Villere said.

The MSCI World Equity Index (.MIWD00000PUS), which tracks stocks from 50 countries, rose 1.42%. The pan-European STOXX 600 index gained 0.57%.

US Treasury yields have retreated from recent highs ahead of the closely watched jobs report and what it may indicate about the possible path of interest rates.

Two Fed officials, Vice Chairman Lael Brainard and Cleveland Fed Chair Loretta Mester, reiterated on Thursday that the US central bank is likely to continue raising rates at a rapid pace unless it sees a moderation of inflation. Read more

Benchmark 10-year bonds were trading at 2.9149%, two-year bonds also at 2.6438%.

On Wall Street, the S&P and Dow Jones recovered from the previous session’s losses and closed higher, with stocks in the technology, consumer discretionary, communication services and financials sectors leading the rebound . Read more

The Dow Jones Industrial Average (.DJI) rose 1.33% to 33,248.28, the S&P 500 (.SPX) gained 1.84% to 4,176.82 and the Nasdaq Composite (.IXIC) added 2.69% to 12,316.90.

Oil prices stabilized after U.S. crude inventories fell more than expected amid strong fuel demand and OPEC+ agreed to boost crude output to offset a drop in Russian output. Read more

Brent crude futures rose 1.69% to $118.26 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 1.97% to $117.53.

The US Dollar eased across the board, giving back some of the ground gained in recent sessions as firmer risk sentiment prompted investors to seek higher-yielding currencies. Read more

The dollar index fell 0.78%, with the euro up 0.94% at $1.0746.

Gold prices rose more than 1%, supported by the weaker dollar and private employment data in the United States. Spot gold gained 1.3% to $1,868.59 an ounce, while US gold futures gained 1.38% to $1,868.70 an ounce.

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Reporting by Chibuike Oguh in New York; edited by Jonathan Oatis and Will Dunham

Our standards: The Thomson Reuters Trust Principles.