Global stocks faced a downturn as investors held their breath for the release of the latest US job numbers, seeking clues on whether the Federal Reserve would support expectations for further interest rate hikes.
European shares experienced their third consecutive day of decline, with utilities and media stocks dragging down the regional benchmark, putting it on track for its worst week since March. US equity futures indicated that losses from Thursday would extend into the S&P 500 and Nasdaq 100 benchmarks, following stronger-than-expected private hiring data. Asian stocks also slid for a third consecutive day.
In corporate news, Just Eat Takeaway.com NV shares fell after Exane and JPMorgan Chase & Co. analysts turned bearish on the food-delivery company. Persimmon Plc, a UK homebuilder, saw its shares decline after Halifax reported that house prices were falling at the fastest annual pace since 2011.
However, Thyssenkrupp AG’s Nucera hydrogen unit saw gains as it began trading in Frankfurt, albeit during a challenging period for new listings in Europe.
The ADP Research Institute’s data showing that US companies added the most jobs in over a year in June prompted traders to increase bets on more rate hikes. The upcoming US non-farm payrolls and unemployment reports are crucial in determining whether expectations for rate hikes will be further revised.
Treasury yields experienced a spike following the ADP numbers. Swap contracts tied to the Federal Reserve’s future policy decisions are pricing in a quarter-point interest-rate hike by July 26, with a growing probability of an additional move by year-end.