Stocks slip on weak US jobs data, oil falls on Ukraine peace hopes

Global stock markets mostly declined on Tuesday after fresh US employment data showed a cooling labour market, while oil prices dropped sharply amid renewed optimism over a possible end to the war in Ukraine.

The US Labor Department said the unemployment rate rose to 4.6 percent in November, the highest level since 2021. The report, delayed by a prolonged government shutdown, also showed the economy lost 105,000 jobs in October. Hiring recovered modestly in November with 64,000 new jobs, though the pace remained well below earlier levels.

Analysts said the data was weaker than expected but not severe enough to spark panic. Forex.com analyst Fawad Razaqzada noted that expectations for a Federal Reserve interest rate cut in March rose to 60 percent following the report, up from about 50 percent previously.

Despite rising hopes for lower borrowing costs, US stock markets moved lower as investors focused on signs of slowing economic momentum. Separate data showed US retail sales were flat in October, missing expectations for a modest increase, while September’s growth was revised lower.

eToro analyst Bret Kenwell said the figures highlighted a resilient consumer alongside a cooling labour market, noting that a key component used to calculate GDP reached its highest level since the summer.

Oil prices fell sharply, with Brent crude dropping below $60 a barrel for the first time since May and US WTI briefly slipping under $55, a level last seen in 2021. Markets reacted to renewed hopes of a peace deal in Ukraine, which could ease sanctions on Russian oil and add to global supply.

US President Donald Trump said on Monday that a deal to end the war was closer than ever, after Washington offered Ukraine NATO-like security guarantees and expressed confidence Russia would agree. Analysts cautioned, however, that previous peace efforts had failed to deliver.

European defence stocks declined following the update on negotiations, while weak UK employment data strengthened expectations that the Bank of England may cut interest rates later this week. The European Central Bank is widely expected to keep rates unchanged.

In currency markets, the yen held gains against the dollar ahead of a likely interest rate hike by the Bank of Japan. Among individual stocks, Pfizer shares fell after the drugmaker forecast lower full-year profits as it increased investment to offset declining Covid-19 revenues.

Major global stock indices closed mostly lower, while both Brent crude and US oil ended the day down nearly 3 percent.