(MENAFN) Global financial markets declined on Friday as diminishing expectations for a December interest rate reduction by the US Federal Reserve, coupled with renewed apprehension over high asset valuations, dampened investor confidence.

Investor attention intensified following the conclusion of the longest US government shutdown in history last week. Recent data revealed that nonfarm payrolls grew by 119,000 in September, surpassing projections, while the unemployment rate edged up to 4.4% from 4.3%.

Additionally, initial jobless claims decreased by 8,000 to 220,000 in the week ending Nov. 15.

Experts noted that the unexpectedly robust employment numbers alleviated concerns regarding a slowing labor market.

This report also represents the final jobs release before the Federal Reserve’s Federal Open Market Committee meeting scheduled for Dec. 9–10.

According to CME FedWatch, traders on Friday assigned a 35.4% probability of a 25-basis-point rate cut in December, a sharp decline from 63.8% just a week earlier.

Comments from Fed officials contributed to the cautious market sentiment. Fed Board Member Lisa Cook remarked that she “wouldn’t be surprised” to witness a sharp correction in asset prices from historically high levels.

She added, “Currently, my impression is that there is an increased likelihood of outsized asset price declines.”

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