LONDON – Wall Street’s main indexes fell on Friday as a sharp slowdown in jobs growth last month gave the strongest signal yet that a post-pandemic economic rebound was losing steam, while banking stocks broadly tracked a jump in bond yields.

The Dow Jones Industrial Average fell 42.09 points, or 0.12 percent, at the open to 35,401.73.

The S&P 500 opened lower by 4.53 points, or 0.10 percent, at 4,532.42, while the Nasdaq Composite dropped 17.76 points, or 0.12 percent, to 15,313.42 at the opening bell. 

Nonfarm payrolls increased by 235,000 in August, well short of the 728,000 forecast by economists in a Reuters poll, while the unemployment rate dipped to 5.2 percent from 5.4 percent in the prior month.

Investors were trying to gauge the timing of the Federal Reserve’s announcement on when it will start scaling back its massive monthly bond buying program.

The dollar index dropped to a low of 91.941, its lowest level since Aug 4, and was last down 0.102 percent at 92.133.

US treasuries had been cautious ahead of the payrolls, but the yield on benchmark 10-year Treasury notes initially climbed all the way to 1.3308 percent compared with its US close of 1.294 percent on Thursday.

MSCI’s all-country world index, which had ended the previous session at its fifth consecutive closing high, inched up further by 0.15 percent.

The European single currency rose 0.2 percent. Markets are starting to react to the potential for more sustained euro zone inflation and reduced stimulus from the European Central Bank, which meets next week.

In Europe, data showed that euro zone business activity remained strong last month, despite fears about the Delta variant of the coronavirus and widespread supply chain issues.

The STOXX index of 600 European companies edged 0.3 percent lower, though still close to its record high of last month.

Japan jumps

Japanese shares jumped after officials said Prime Minister Yoshihide Suga would step down, setting the stage for a new premier after a one-year tenure marred by an unpopular COVID-19 response and rapidly dwindling public support.

Japan’s TOPIX stock index rose to a 30-year high and was last up 1.61 percent, with the Nikkei gaining 2 percent. Asian shares are still off their peaks from earlier in the year however, and lagging those elsewhere.

Oil prices were firmer, with US crude gaining 0.7 percent to US$70.45 a barrel. Brent crude rose 0.8 percent to US$73.62 per barrel.

Gold gained 0.9 percent to US$1,824 an ounce.