Volkswacht Bodensee - Strong US jobs report sends stocks sliding, dollar rising

Oil prices, meanwhile, jumped past $80 per barrel on talk of possible new US sanctions on Russia.

The world's biggest economy created 256,000 jobs last month, up from a revised 212,000 in November, said the Labor Department.

The figure smashed market expectations of between 150,000 and 160,000 jobs.

Traders have looked at data showing the US economy is strong as reducing the chances of further Federal Reserve rate cuts, which has seen bond yields and the dollar climb and stocks lower.

Similar movements took place after the release of the jobs data.

"The key takeaway from the report for the market is that it was perhaps too good," said Briefing.com analyst Patrick O'Hare.

The Fed indicated last month that it would cut rates just twice this year -- down from the four previously flagged -- due to sticky inflation.

That came amid concerns that incoming president Donald Trump's plans to slash taxes, regulations and immigration -- and to impose harsh tariffs on imports -- would reignite prices.

O'Hare said the strong jobs report suggests "the Fed may have made a mistake cutting rates as aggressively as it did at the end of 2024".

It also could mean that "there isn't going to be another rate cut for an extended period", he added.

Market expectations of the next rate cut shifted back to October.

"The market may not love this jobs number, but there are a lot worse things than a strong labour market," said US investment analyst Bret Kenwell at eToro trading platform.

A strong jobs market is needed to keep consumers spending, which is the motor of the US economy, he noted.

"Investors need to keep that in mind -- even if that means rate-cut expectations take a step back," Kenwell added.

- Bond pressure -

The yield on US government bonds jumped following the jobs report.

Across the Atlantic, UK 10-year bond yields remained high after surging to their highest level since the 2008 global financial crisis, amid talk the government may have to make spending cuts or hike taxes to help repay state debt.

The pound remained under pressure after Thursday hitting levels not seen since late 2023 against the dollar on worries about the UK economy.

"The global bond selloff showed few signs of letting up... with long-term borrowing costs continuing to move higher," noted Jim Reid, managing director at Deutsche Bank.

"Even though the UK might appear the most striking in terms of when yields last traded at these levels, other countries have experienced a similar pattern too," he added.

London stocks were lower in afternoon trading, while Frankfurt and Paris rebounded after dropping in the wake of the release of the US jobs numbers.

In Asia, Tokyo, Hong Kong and Shanghai stock markets closed lower Friday.

Oil prices jumped over four percent to above $80 per barrel as analysts expect the United States to soon announce more sanctions against Russia, further disrupting its crude exports and therefore tightening supplies.

- Key figures around 1430 GMT -

New York - Dow: DOWN 0.5 percent at 42,418.50 points

New York - S&P 500: DOWN 0.6 percent at 5,881.25

New York - Nasdaq Composite: DOWN 0.9 percent at 19,304.94

London - FTSE 100: DOWN 0.2 percent at 8,302.47

Paris - CAC 40: UP 0.1 percent at 7,498.78

Frankfurt - DAX: UP 0.2 percent at 20,361.79

Tokyo - Nikkei 225: DOWN 1.1 percent at 39,190.40 (close)

Hong Kong - Hang Seng Index: DOWN 0.9 percent at 19,064.29 (close)

Shanghai - Composite: DOWN 1.3 percent at 3,168.52 (close)

Euro/dollar: DOWN at $1.0261 from $1.0296 on Thursday

Pound/dollar: DOWN at $1.2247 from $1.2293

Dollar/yen: UP at 158.23 yen from 157.96 yen

Euro/pound: UP at 83.79 pence from 83.75 pence

Brent North Sea Crude: UP 4.3 percent at $80.24 per barrel

West Texas Intermediate: UP 4.6 percent at $77.35 per barrel

burs-rl/lth

A.Ammann--VB