(MENAFN) Global financial markets declined on Friday as diminishing hopes for a December interest rate reduction by the US Federal Reserve and renewed worries about inflated asset valuations weighed on investor confidence.

Market attention intensified following the conclusion of the longest US government shutdown in history last week. Recent data revealed nonfarm payrolls increased by 119,000 in September, surpassing expectations, while the unemployment rate inched up to 4.4% from 4.3%. Meanwhile, initial jobless claims decreased by 8,000 to 220,000 in the week ending Nov. 15.

Analysts noted that the stronger-than-anticipated employment statistics alleviated concerns regarding a cooling labor market. This report also represents the final jobs release prior to 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 to a 25-basis-point rate reduction in December, a steep drop from 63.8% just a week earlier.

Comments from Federal Reserve officials contributed to the cautious sentiment. Fed Board Member Lisa Cook stated she “wouldn’t be surprised” to see a sharp correction in asset prices from historically high levels.

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

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