Global equity markets edged broadly lower on Tuesday as investors absorbed fresh indications that the United States labour market is losing momentum, while oil prices fell sharply on renewed optimism that Russia’s war in Ukraine could be moving closer to a negotiated settlement. The interplay between weakening economic signals and shifting geopolitical expectations left investors cautious, tempering risk appetite across equities, commodities and foreign exchange markets.
Figures released by the US Labor Department showed that the unemployment rate climbed to 4.6 per cent in November, its highest level since 2021 and a clear sign that labour market tightness is beginning to ease. The long-delayed report—postponed due to a protracted government shutdown—also revealed that the US economy shed 105,000 jobs in October. Although employment growth resumed in November, with payrolls rising by 64,000, the pace of hiring remained markedly slower than earlier in the year, reinforcing concerns that economic activity is gradually cooling.
Market participants largely described the data as weaker than expected, though not sufficiently dire to provoke fears of an abrupt downturn. Fawad Razaqzada, an analyst at Forex.com, noted that expectations for an interest rate cut by the US Federal Reserve as early as March rose to approximately 60 per cent following the report, up from around 50 per cent previously. Ordinarily, such expectations might lend support to share prices; however, Wall Street’s main indices drifted lower as investors focused on the broader implications of a slowing economy rather than the prospect of cheaper borrowing.
Additional economic data offered a mixed picture of consumer resilience. US retail sales were unchanged in October, disappointing forecasts for a modest increase, while September’s growth was revised down to a marginal 0.1 per cent. Nevertheless, Bret Kenwell of eToro pointed out that a key component used in calculating gross domestic product rose to its highest level since the summer. “The latest figures underline two themes shaping the outlook: a resilient consumer base alongside a cooling labour market,” he observed.
Commodity markets were dominated by a sharp sell-off in oil. Brent crude slipped below 60 dollars a barrel for the first time since May, while US West Texas Intermediate briefly fell under 55 dollars, its lowest level since 2021. Prices were pressured by hopes that a peace agreement in Ukraine could lead to an easing of sanctions on Russian oil, exacerbating concerns over global oversupply. US President Donald Trump said on Monday that a deal was “closer than ever”, citing proposed NATO-style security guarantees for Kyiv and confidence that Moscow would accept the arrangement.
Kathleen Brooks, research director at XTB, also highlighted bearish technical signals, noting that spot prices for Middle Eastern crude were trading below futures contracts—a structure often associated with expectations of further price declines.
In Europe, defence stocks retreated amid optimism over peace talks, while investors assessed central bank prospects. Weak UK labour data strengthened expectations of an imminent interest rate cut by the Bank of England, whereas the European Central Bank is widely expected to keep rates unchanged. In Asia, the yen held firm against the dollar ahead of a potential interest rate rise by the Bank of Japan later this week.
Among individual companies, Pfizer shares slid 3.4 per cent after the pharmaceutical group forecast a dip in full-year adjusted earnings per share, reflecting increased investment in new products to offset fading Covid-related revenues.