US stocks lost early momentum on Friday after a bleak August jobs report cemented expectations of imminent Federal Reserve easing. The S&P 500 slipped 0.3%, the Dow Jones fell 0.4% and the Nasdaq edged 0.1% lower.
The Bureau of Labor Statistics reported just 22,000 jobs created in August, far below the 75,000 forecast. Revisions showed June’s payrolls turning negative for the first time since 2020 and July weaker than initially reported. The unemployment rate ticked up to 4.3% from 4.2%.
The figures capped a week of soft labour market data and pushed traders to fully price in a rate cut at the September Fed meeting, with growing bets on a 50-basis-point move. Bond yields dropped further, with the 10-year at 4.07% and the 30-year at 4.79%. The dollar also weakened, while gold climbed to $3,589 an ounce.
In London, the FTSE 100 pared gains to finish 0.1% lower at 9,208.21. Insurers and housebuilders provided some support, with Aviva up 1.6% after a bullish broker note and Berkeley Group rising 3% on stable earnings guidance and a supportive policy backdrop. Persimmon, Barratt Redrow and Taylor Wimpey also advanced after Halifax data showed UK house prices hitting a record high.
Retailer Next added 0.8% on stronger July sales, while Admiral fell 3% after a downgrade. BP and Shell both dropped more than 2% as Brent crude slipped to $65.14.
Political developments overshadowed the close in Westminster. Angela Rayner resigned as deputy prime minister and housing secretary after a breach of the ministerial code, triggering a wider Labour reshuffle. Reports suggested Yvette Cooper may move to the Foreign Office, with David Lammy stepping aside to become deputy PM.
In Europe, Paris’s CAC 40 shed 0.6% and Frankfurt’s DAX 40 fell 0.9% as global growth concerns took hold.