Asian markets were mixed and in weak trading following the release of better-than-expected employment data on Friday.
HONG KONG — Asian markets were mixed on Monday after better-than-expected jobs data was released on Friday, while the euro fell after French President Emmanuel Macron dissolved the National Assembly following defeat in Sunday’s parliamentary elections.
U.S. futures and oil prices rose.
Trading in Asia was slow with markets in China, Hong Kong, Australia and Taiwan closed for holidays.
In Tokyo, the Nikkei average rose 0.5% to 38,872.19. Japan’s economy contracted at an annualized rate of 1.8% from the previous quarter in January-March, government data released on Monday revised up from a 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 would dissolve the National Assembly and call snap elections, sending the euro tumbling to its lowest in nearly a month. It fell to $1.0766 from $1.0778 in Monday trading.
On Friday, the S&P 500 fell 0.1% to 5,346.99, the Nasdaq Composite lost 0.2% to 38,798.99 and the Dow Jones Industrial Average lost 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 the unemployment rate rising for a second straight month. Overall, the job market remains strong but is showing some signs of weakening. A strong job market has supported consumer spending and the overall economy, but it complicates the direction of the Federal Reserve’s future interest rate policy.
The yield on the 10-year Treasury note jumped to 4.43% from 4.29% just before the jobs report was released. The yield on the 2-year note, which more accurately reflects the Fed’s expectations, jumped to 4.89% from 4.74% just before the jobs report was released.
Wall Street expects at least one cut in the Fed’s benchmark interest rate by the end of the year. The central bank has raised interest rates to their highest level in more than two decades in an attempt to keep inflation at its 2% target. But inflation has remained stubbornly around 3% after falling sharply over the past two years. A strong economy could keep prices rising at a faster clip.
A slowdown in the economy could drive down inflation and prompt the Fed to cut interest rates, which traders want. The danger is that the slowdown could go too far and tip into a recession, ultimately causing stock prices to fall.
Economic data last week hinted at a possible economic slowdown, with the latest reports showing that manufacturing contracted in May, worker productivity was not as strong as economists had thought and job openings were declining.
Fed officials are expected to keep interest rates steady when they meet later this week. After the jobs report was released, investors further backed off expectations that the Fed would cut rates at its July meeting, according to CME Group data.
Wall Street is also watching retailer earnings as customers cut back on non-essential goods. Consumer spending is a major driver of the economy, but persistent inflation is hurting consumers, especially lower-income earners.
GameStop, the struggling video game retailer at the center of the meme-stock boom, saw its shares fall 39.4% after it reported another quarterly loss and announced plans to sell up to 75 million more shares.
Meanwhile, benchmark U.S. crude rose 23 cents to $75.76 a barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, rose 28 cents to $79.90 a barrel.
The U.S. dollar rose to 157.12 yen from 156.83 yen.
