Global financial markets moved cautiously lower on Tuesday as investors weighed fresh signs of a cooling United States labour market against shifting geopolitical expectations surrounding the war in Ukraine. The combination of softer economic signals from the world’s largest economy and renewed optimism over a potential peace settlement weighed on equities, commodities and currencies, prompting a broad reduction in risk appetite.
The immediate catalyst for market unease came from delayed labour market figures released by the US Labor Department. The report, postponed for weeks due to a prolonged government shutdown, showed that the unemployment rate rose to 4.6 per cent in November, its highest level since 2021. The data confirmed that the previously tight labour market is gradually loosening, a trend closely watched by policymakers and investors alike.
More concerning for markets was the revelation that the US economy lost 105,000 jobs in October. Although hiring resumed in November, with payrolls increasing by 64,000, the rebound was modest by historical standards and far below levels seen earlier in the year. Taken together, the figures reinforced the view that economic momentum in the United States is easing rather than collapsing.
Analysts broadly characterised the data as weaker than expected but not severe enough to trigger fears of an imminent recession. Fawad Razaqzada of Forex.com observed that the probability of an interest rate cut by the Federal Reserve as early as March climbed to around 60 per cent, up from roughly 50 per cent prior to the release. Under normal circumstances, the prospect of lower borrowing costs might buoy equity markets. Instead, Wall Street’s main indices edged lower, as investors focused on the broader implications of slowing growth.
Other economic indicators painted a mixed picture. US retail sales were flat in October, missing expectations of a modest rise, while September’s growth was revised down to just 0.1 per cent. However, a key component used in calculating gross domestic product rose to its highest level since the summer, suggesting that consumer spending, while slowing, remains resilient.
Commodity markets saw sharper moves, particularly in oil. Crude prices slumped on renewed optimism that Russia’s war in Ukraine may be edging closer to a negotiated settlement. Brent crude fell below 60 dollars a barrel for the first time since May, while US West Texas Intermediate briefly dropped under 55 dollars, its lowest level since 2021. Investors fear that any easing of sanctions on Russian exports could worsen global oversupply.
Key market figures are summarised below:
| Indicator | Latest Reading | Previous/Context |
|---|---|---|
| US unemployment rate | 4.6% | Highest since 2021 |
| US job losses (October) | -105,000 | First monthly decline in months |
| US payroll gains (November) | +64,000 | Slower hiring pace |
| Brent crude oil | Below $60 | Lowest since May |
| WTI crude oil | Below $55 | Lowest since 2021 |
Geopolitical sentiment was further shaped by comments from US President Donald Trump, who stated that a peace deal was “closer than ever”, citing proposed NATO-style security guarantees for Ukraine and confidence that Moscow would accept the framework. Kathleen Brooks of XTB also noted that technical signals in oil markets were turning increasingly bearish, with spot prices trading below futures contracts.
In Europe, defence stocks retreated on hopes of de-escalation in Ukraine, while weak UK labour data strengthened expectations of an interest rate cut by the Bank of England. In Asia, the Japanese yen held firm ahead of a potential rate rise by the Bank of Japan.
At the corporate level, Pfizer shares fell 3.4 per cent after the company warned that higher investment in new products would weigh on earnings, highlighting how shifting economic and sector-specific pressures continue to shape market performance worldwide.