US jobs data boosts rate cut hopes but stocks slide

Analysts had expected the figures to confirm a cooled labour market as companies pull back on hiring amid ongoing uncertainty over President Donald Trump's tariffs.

Ahead of the figures, the market had already largely priced in an interest rate cut of a quarter percentage point, or 25 basis points, when the US Federal Reserve holds its monetary policy meeting later this month.

But the numbers were well below the 77,000 jobs analysts had expected.

"An initially positive reaction to today’s weak payrolls report has given way to some classic 'buy the rumour, sell the fact' action," said Chris Beauchamp, chief market analyst at investing and trading platform IG.

"Traders are battling a mix of relief that today's report confirms a September rate cut while being worried that weak period of job growth spells stagflation ahead."

Stagflation is a period of little to no economic growth coupled with high inflation and elevated unemployment.

The jobs data also sent the dollar and US Treasury yields lower, while gold hit a new record high.

Gold has benefitted as refuge for investors turning away from long-term bonds, which have recently been hit by concerns about debt sustainability.

Gloomy economic data has recently supported stocks as investors see it as boosting chances the Fed will cut interest rates, which is positive for businesses.

However, "as concerns about the economy grow, we could see stocks struggle," warned Kathleen Brooks, research director at trading group XTB.

European stocks ended the day lower.

In Asia, China's blue-chip CSI 300 benchmark recovered after falling 2.1 percent the previous day -- the largest drop since early April when Trump's tariff threats caused the index to drop more than seven percent in one day.

An August rally in Chinese stocks, fuelled by surging shares in semiconductor firms, ground to a halt this week, with Cambricon Technologies tumbling 14 percent Thursday on reports of a regulatory clampdown.

Tokyo also climbed after Trump signed an order to lower tariffs on Japanese autos to 15 percent from 27.5 percent.

Oil prices extended losses in anticipation of excess supply in the coming months as OPEC+ nations, which include Saudi Arabia and Russia, are expected to further unwind production cuts this weekend.

Oil has tumbled more than 12 percent this year as global producers outside OPEC+ ramp up supply and tariffs curb demand.

Shares in Tesla climbed 3.1 percent after the board of the US electric vehicle maker proposed a pay package for CEO Elon Musk that could top $1 trillion if certain performance milestones are met.

- Key figures at around 1530 GMT -

New York - Dow: DOWN 0.5 percent at 45,394 points

New York - S&P 500: DOWN 0.5 percent at 6,471.36

New York - Nasdaq Composite: DOWN 0.3 percent at 21,645.98

London - FTSE 100: DOWN less than 0.1 percent at 9,208.21 (close)

Paris - CAC 40: DOWN 0.3 percent at 7,674.78 (close)

Frankfurt - DAX: DOWN 0.7 percent at 23,596.98 (close)

Tokyo - Nikkei 225: UP 1.0 percent at 43,018.75 (close)

Hong Kong - Hang Seng Index: UP 1.4 percent at 25,417.98 (close)

Shanghai - Composite: UP 1.2 percent at 3,812.51 (close) 

Euro/dollar: UP at $1.1748 from $1.1649 on Thursday

Pound/dollar: UP at $1.3535 from $1.3437

Dollar/yen: DOWN at 146.95 yen from 148.45 yen

Euro/pound: UP at 86.83 from 86.72 pence

West Texas Intermediate: DOWN 3.0 percent at $61.55 per barrel

Brent North Sea Crude: DOWN 2.8 percent at $65.14 per barrel

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