Global Markets React to Mixed U.S. Jobs Report: MSCI Index Falls, Treasury Yields Drop

MSCI's global equities gauge dropped over 1% as investors reacted to a mixed U.S. jobs report. The report solidified expectations for a Federal Reserve rate cut but introduced uncertainty about its size. U.S. Treasury yields also fell as traders adjusted their bets on the extent of the rate cut.

MSCI's global equities gauge fell more than 1% on Friday as U.S. Treasury yields dropped. Investors are concerned about the economy's health following a mixed U.S. jobs report, which has cemented the expectation of a Federal Reserve rate cut this month but created uncertainty about the cut's size.

Job growth for August was lower than expected at 142,000, missing economists' predictions of 160,000 and signaling a labor market slowdown. This report influenced market bets, with traders now seeing a 73% chance of a 25 basis point rate cut, up from 60% the day before.

Wall Street indexes closed sharply lower as investors digested the news; the Dow, S&P 500, and Nasdaq all posted significant losses. Meanwhile, European markets also mirrored this trend with Germany's DAX and Europe's STOXX 600 closing down amid concerns of slowing industrial production.

(With inputs from agencies.)