Global Markets Surge as Weak US Jobs Data Relieves Rate Hike Fears

Global equity markets rallied on Friday, driven by a sharp rebound in technology stocks and growing investor optimism that the U.S. Federal Reserve will hold off on raising interest rates.

With U.S. financial markets closed for the Independence Day holiday, global trading was heavily influenced by Thursday’s weaker-than-expected American employment data. The U.S. economy added fewer than half the jobs economists had projected for June, while hiring figures for the previous two months were downwardly revised. This cooling in the labor market provides the Fed with additional breathing room, calming recent speculation about imminent policy tightening.

Key Takeaways from Global Trading

• Tech Stocks Bounce Back: Technology shares led the charge, offering relief after a period of heavy selling. South Korea’s Kospi index surged 5.8%, driven by massive rallies in chip giants Samsung and SK Hynix, recovering significantly after hitting a 20% drop from its mid-June peak.

• Currency and Commodity Shifts: The Japanese yen showed signs of recovery after recently sliding to a 40-year low against the U.S. dollar on previous rate-hike fears. Meanwhile, global oil prices remained steady as traders monitored traffic flows through the Strait of Hormuz and ongoing U.S.-Iran talks.

• The European Advantage: European stock markets climbed as lower U.S. rate expectations mitigated the risk of capital fleeing to higher-yielding American assets. Analysts pointed out that European indexes, which trade at lower price-to-earnings (P/E) multiples compared to their U.S. counterparts, offered attractive value and less direct exposure to volatile AI-driven tech valuations.

Market View: “The U.S. labor market today is not strong enough to instigate rate hikes but, importantly, is no longer a handbrake or impediment to hikes,” noted Rodrigo Catril, an analyst at National Australia Bank.

Closing Market Snapshot