(Bloomberg) -- Stocks staged a partial recovery Monday after a selloff triggered by cooling US jobs data that left economists and traders at odds as to how aggressively the Federal Reserve will cut interest rates.
The Stoxx Europe 600 benchmark gained 0.7%, paring some of last week’s 3.5% loss. Futures for the S&P 500 and Nasdaq 100 both advanced after the underlying indexes slumped Friday following the weaker-than-forecast US payrolls numbers. Bonds reversed some of their recent gains, with the 10-year Treasury yield jumping five basis points, the first increase in five days. A gauge of the dollar advanced.
The choice facing Fed officials — whether to start easing gradually or to front-load rate cuts — is bound to be contentious. With recession fears also resurfacing, investors are scrutinizing economic data for clues on the likely rate path. Wednesday’s US consumer-inflation numbers are next on the radar. Meanwhile, the European Central Bank is forecast to cut its benchmark rate when it meets Thursday.
While a September Fed rate cut is essentially a done deal, “the question of course is how many and what size the cuts will be later on,” Louis Kuijs, Asia-Pacific chief economist at S&P Global in Hong Kong, said in an interview on Bloomberg Television “There are lots of risks across the global economy,” which matters to the Fed, he said.
Traders reacted to the payrolls data by increasing bets on a 50 basis-point Fed cut this month.
September is proving a volatile month for markets with stocks and commodities both sliding amid concern about waning global growth. Wall Street’s fear gauge — the Cboe Volatility Index —remains elevated after closing at its highest in a month on Friday.
US data Friday showing weaker payrolls growth reinforced the view that the labor market is cooling and sent stocks reeling. The S&P 500 fell 4.25% last week, while the Nasdaq 100 lost the most since November 2022.
Some key events this week:
Some of the main moves in markets:
Stocks
Currencies
Cryptocurrencies
Bonds
Commodities
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Georgina McKay and Matthew Burgess.
