Europe open: Stoxx hits fresh high as US jobs data cools rate hike chances

(Sharecast News) - European shares rallied and hit fresh highs on Friday as a weaker-than-expected US jobs market report reduced the chances of an interest rate hike by the Federal Reserve.

The pan-regional Stoxx 600 index was up 0.42% to 650 at 0831 BST after reaching 651.78 with all major bourses higher. US markets are closed for the July 4 Independence Day holiday.

Asia-Pacific markets made gains and reversed losses driven by investor fears over the scale of investment in artificial intelligence.

The US economy added just 57,000 jobs in June, well below the downwardly revised 129,000 recorded in May, according to the Bureau of Labor Statistics. This was well short of forecasts for 110,000, marking the weakest gain in four months. Revisions subtracted 74,000 jobs from the combined April and May totals.

Investors now believe the Federal Reserve will now look at holding off from making any interest rate hikes.

"The market still expects the Fed to hike once this year-with a little more than a 50% chance of that happening as early as September. The US two-year yield is softer but holding above the 4.10% mark, as US crude rebounds slightly from yesterday's dip to $67pb but remains calm near the $70pb level, with no major headlines on the peace negotiations front," said Swissquote analyst Ipek Ozkardeskaya.

"There is more news about increasing oversupply in key markets, and tens of millions of barrels of Iranian oil sailing without a preset destination, than worries about supply shortages."

Reporting by Frank Prenesti for Sharecast.com