Volkswacht Bodensee - Wall Street bounces while oil prices climb on Middle East worries

Oil prices gained following reports that Iran was planning a major retaliatory strike on Israel, reviving the market's geopolitical fears.

Big tech delivered a mixed bag of earnings this week, with concerns over AI spending overshadowing better-than-expected results from Microsoft and Facebook-parent Meta.

Wall Street closed sharply lower Thursday, with the tech-rich Nasdaq Composite index dropping nearly three percent.

But they snapped higher on Friday, with the Nasdaq gaining more than one percent in what Briefing.com analyst Patrick O'Hare called buy-the-dip action following Thursday's losses.

"The pertinent question is, will buy-the-dip interest win out (again) or will there be follow-through selling?"

Data showing US job growth slowed drastically in October -- albeit affected by hurricanes and strikes -- reassured investors that the US Federal Reserve will continue cutting interest rates.

The world's biggest economy added 12,000 jobs last month, far below expectations and down from a revised 223,000 in September, said the Department of Labor in its monthly non-farm payrolls report.

"The key takeaway from the report is that it has reinvigorated the market's view that the Fed will stay on a steady rate-cut path," O'Hare said.

Expectations of a major rate cut by the Fed, like the bumper 50 basis point cut in September, have receded after data showed strong economic growth in the United States and inflation just above the central bank's long-term two percent target.

But the "lower-than-expected jobs creation could prompt the Fed to follow through with the widely anticipated 25 basis point cut following their next meeting later next week," said Mahmoud Alkudsi, senior market analyst at ADSS brokerage.

eToro US investment analyst Bret Kenwell said the October jobs numbers "should keep a December rate cut on the table, too".

Separate data showed that activity in the US manufacturing sector contracted for a seventh straight month in October.

The fresh economic data came ahead of next week's coin-toss US election between Vice President Kamala Harris and former president Donald Trump, with jobs and the cost of living being key issues for voters.

Major European markets closed the day higher.

London gained 0.8 percent despite lingering fears of the consequences of the Labour government's high-tax, high-spending budget unveiled this week.

Britain's 10-year borrowing rate reached its highest level since November 2023 on Thursday, on fears of a resurgence in inflation.

"Worries continue to swirl about the UK Budget stoking inflation and adding to the debt burden," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Asian markets closed mixed, with Tokyo down more than two percent as tech shares on the Nikkei were dragged down following the drop on Wall Street.

Shanghai also ended lower despite a forecast-beating Chinese manufacturing report that boosted hopes for a recovery in the world's second-largest economy.

"Markets have already priced in some risks of a second Trump presidency as they await the US presidential election," Lloyd Chan, an analyst at MUFG Global Markets Research, said in a note.

He added that Trump's proposed economic policies, including tariffs, could hurt the outlook for Asian economies.

- Key figures around 1630 GMT -

New York - Dow: UP 1.0 percent at 42,183.86 points

New York - S&P 500: UP 0.8 percent at 5,751.56

New York - Nasdaq Composite: UP 1.2 percent at 18,303.34

London - FTSE 100: UP 0.8 percent at 8,177.15 (close)

Paris - CAC 40: UP 0.8 percent at 7,409.11 (close)

Frankfurt - DAX: UP 0.9 percent at 19,254.97 (close)

Tokyo - Nikkei 225: DOWN 2.6 percent at 38,053.67 (close)

Hong Kong - Hang Seng Index: UP 0.9 percent at 20,506.43 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,272.01 (close)

Euro/dollar: DOWN at $1.0850 from $1.0883 on Thursday

Pound/dollar: UP at $1.2949 from $1.2896

Dollar/yen: UP at 152.94 yen from 152.00 yen

Euro/pound: DOWN at 83.80 from 84.38 pence

Brent North Sea Crude: UP 0.9 percent at $73.45 per barrel

West Texas Intermediate: UP 0.9 percent at $69.91 per barrel

burs-rl/sbk

R.Flueckiger--VB