Global markets ended mostly down on Friday, concluding a volatile week that saw investors fret over inflation and worries about slowing growth despite a solid US jobs report.
On Wall Street, a week marked by fickle trading, quick reversals and heightened anxiety dragged the S&P 500 to its lowest level in about a year, posting its fifth straight weekly drop, the longest losing streak since June 2011.
The tech-heavy Nasdaq underperformed, sliding 1.5 per cent to register its lowest closing level since November 2020. The Dow inched down 0.3 per cent.
The US economy added a better-than-expected 428,000 jobs in April, with the unemployment rate remaining at a low 3.6 per cent, the Labour Department reported. The data pointed to continued strong employment growth and contained hints that some inflationary pressures may be easing, with workers' wages rising less than in March.
But investors remain anxious that rising prices and higher interest rates will hit consumers, slowing the economy's expansion in the second half of 2022.
"There is a real concern about slowing growth and the possibility that the economy could tip into recession," said Briefing.com analyst Patrick O'Hare.
Major European indices closed down, with London's FTSE 100 slipping 1.5 per cent, Frankfurt's DAX losing 1.6 per cent and Paris' CAC 40 declining 1.7 per cent.
Losses were heavier earlier in Asia as traders contemplated a period of fierce monetary tightening by the US Federal Reserve. Hong Kong's Hang Seng Index slid 3.8 per cent and the Shanghai Composite lost 2.2 per cent. Tokyo's Nikkei 225 was able to eke out a 0.7 per cent at the close.
"A sinking feeling has taken over financial markets at the end of a volatile week," said Hargreaves Lansdown analyst Susannah Streeter.
"Investors are digesting the unpalatable implications of inflation and fretting that there will be a need for a bigger dose of the bitter medicine being administered to try and bring it under control."
Meanwhile, the pound hit a two-year low at $1.2276, one day after the Bank of England warned that UK inflation would top 10 per cent and the economy would contract later this year.
The euro jumped to 85.92 pence, which was last seen late in 2021.
Gold rose on a weaker dollar but the prospect of aggressive rate hikes from the Fed led bullion to post its third straight weekly decline.
US gold futures settled 0.4 per cent higher at $1,882.80 an ounce.
