HONG KONG– Asian markets were mixed on Monday after a jobs report released on Friday was hotter than expected, while the euro fell after French President Emmanuel Macron dissolved the National Assembly following a setback in Sunday’s parliamentary elections.
US futures and oil prices rose.
Trading in Asia was muted, with markets in China, Hong Kong, Australia and Taiwan closed for holidays.
In Tokyo, the Nikkei 225 index rose 0.5% to 38,872.19 after government data on Monday showed Japan’s economy contracted at an annualized pace of 1.8% between January and March compared with the previous quarter, an upward revision from the previously announced 2% decline.
South Korea’s Kospi fell 0.7% to 2,705.06.
Meanwhile, in Europe, far-right parties made big gains in Sunday’s parliamentary elections, prompting French President Emmanuel Macron to announce he was dissolving the National Assembly and call early legislative elections. This caused the euro to fall to its lowest price in almost a month. In trading on Monday, the euro was trading at $1.0766, down from $1.0778.
On Friday, S.&OP 500 fell 0.1% to 5,346.99, the Nasdaq Composite fell 0.2% to 38,798.99 and the Dow Jones Industrial Average fell 0.2% to 38,798.99.
U.S. employers added 272,000 jobs in May, an increase from April and more than economists expected. The report also showed that the unemployment rate increased for the second month in a row. Overall, it signals continued strength in the job market, with some small signs of weakening. The strong labor market has supported consumer spending and the broader economy, but it has also complicated the Federal Reserve’s path forward on interest rates.
The 10-year Treasury yield jumped to 4.43% from 4.29% just before the jobs report was released. The two-year yield, which more closely tracks expectations for the Fed, jumped to 4.89% from 4.74% before the report was released.
Wall Street expects at least one cut in the Fed’s benchmark interest rate before the end of the year. The central bank raised its interest rate to its highest level in more than two decades in a bid to cool inflation to its 2% target. However, inflation has stubbornly hovered around 3%, after falling sharply over the past two years. A strong economy could continue to fuel price increases.
A cooler economy could reduce inflation and lead the Fed to make the interest rate cuts that investors want. The danger is that the slowdown overtakes and turns into a recession, which would ultimately hurt stock prices.
Last week’s economic data suggested the economy could be cooling. The latest reports show that manufacturing contracted in May, worker productivity is not as strong as economists thought and job openings are shrinking.
Fed officials are expected to hold interest rates steady at their meeting later this week. Following the release of the jobs report, investors pulled back even more bets that the Fed would cut rates at its July meeting, according to data from CME Group.
Wall Street has also been monitoring retailers’ profits, which has shown that customers have been pulling back on non-essential products. Consumer spending has been the main support for the economy, but persistent inflation is hurting consumers, especially those on lower incomes.
GameStopThe troubled video game retailer at the center of the meme stock craze, fell 39.4% after reporting another quarterly loss and saying it planned to sell up to 75 million more shares.
In other trading, benchmark US crude oil gained 23 cents to $75.76 per barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, rose 28 cents to $79.90 per barrel.
The US dollar rose to 157.12 Japanese yen from 156.83 yen.
This story originally appeared on ABCNews.go.com read the full story
