Markets Sway as Interest Rate Expectations Shift

Global stocks slipped and U.S. Treasury yields climbed after a strong U.S. payrolls report. Investors reassess Federal Reserve interest rate expectations, causing market fluctuations. Wall Street indices experienced modest declines amid rising crude prices. Key economic data and Fed speeches are awaited for further market direction.

In a dynamic start to the week, global stocks experienced a slight dip while U.S. Treasury yields surged. The benchmark 10-year note exceeded the 4% mark, reaching a new high since August. This movement comes as investors realign their expectations for the Federal Reserve's interest rate trajectory following a robust U.S. payroll report.

The shift in outlook has led investors to anticipate an 84.6% probability of a 25 basis-point rate cut at the Fed's upcoming November meeting, according to CME's FedWatch Tool. Last week's market projection included a 34.7% chance of a more significant 50 basis-point cut, now reduced due to recent strong economic indicators.

Wall Street reflected these changes with notable declines across major indices. Although energy shares rose amidst climbing crude prices, other sectors weighed heavily on the market. Economic players are keenly awaiting Thursday's consumer price index release and several addresses by Fed officials, which are expected to provide further clues on economic policy direction.

(With inputs from agencies.)