European stocks fall for fifth consecutive session amid mixed US jobs data
(MENAFN) European stock markets experienced a significant drop on Friday, marking their fifth consecutive session of losses, and reflecting their worst intraday performance since early August. The pan-European STOXX 600 index fell by 1 percent, ending a four-week winning streak and suffering a 2.5 percent decline over the week, which is the most substantial drop since the week ending August 2. This downturn came after a mixed U.S. jobs report created uncertainty regarding the Federal Reserve's potential interest rate decisions for its upcoming meeting.
The U.S. jobs data revealed that employment growth in August was below expectations, which might lower the probability of the Federal Reserve implementing a more substantial 50 basis point rate cut, as opposed to a 25 basis point reduction. The data also highlighted a decrease in the unemployment rate. According to the CME Group's FedWatch tool, traders initially saw a 23 percent chance of a 50 basis point rate cut by 16:11 GMT, with the probability briefly spiking to 51 percent following the data release.
All major European indices fell by approximately 1 percent, with Germany's DAX suffering a 1.6 percent drop to a two-week low. This decline was partly driven by disappointing data showing a 2.4 percent drop in Germany's industrial output for July, significantly worse than the anticipated 0.3 percent decline. The sectors hardest hit included technology, materials, and energy, with each sector declining more than 2 percent. The technology sector, in particular, was pressured by falling chip stocks, following lackluster results from Broadcom. Additionally, Volvo's shares plummeted by 5.7 percent after the Swedish carmaker revised its margin and revenue forecasts downward for the second time this year. Meanwhile, the European Central Bank is expected to announce a 25 basis point rate cut in its upcoming meeting.
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