Australia

Australian shares are set to fall at the open after US equities extended losses on Friday following strong US jobs data some feared strengthened the case for higher rates sooner.

ASX futures were down 51 points or 0.7% at 7107 as of last trade on Saturday, suggesting a negative start to trading in the wake of Friday’s record losses.

The S&P 500 on Friday shed 0.6%, capping a fifth consecutive week of losses, the longest streak since June 2011. The technology-heavy Nasdaq Composite lost 1.4%. The Dow Jones Industrial Average lost 0.3%, after slumping more than 1,000 points Thursday, its worst day since 2020.

All three major indexes notched modest weekly losses. The S&P 500 and Dow shed 0.2% each for the week. The Nasdaq fell 1.5%, its fifth weekly loss of at least 1%--the longest such stretch since August 2002, according to Dow Jones Market Data.

Stocks soared Wednesday after the Federal Reserve raised interest rates by half a percentage point, buoyed by relief that it wasn't actively considering even larger increases in the future, but that relief faded Thursday and Friday as investors reassessed the outlook for stocks, leading to a punishing selloff that caught many investors off guard.

The volatility continued early Friday. Futures briefly turned higher following the release of a strong April jobs report, before resuming their slide. Some investors said the report was outweighed by worries about the Fed's rate path.

The strong jobs report "could also mean that the Fed has a little bit more leeway to be aggressive," said Amy Kong, chief investment officer at Barrett Asset Management.

Locally, the S&P/ASX 200 closed 2.2% lower at 7205.6, as the benchmark index matched its biggest weekly loss since October 2020.

All 11 ASX 200 sectors finished lower to round out a 3.1% weekly fall, the second time in 2022 that the index has lost that percentage over a week.

With US tech stocks routed, Australia's tech sector tumbled 4.6%. Shares of all 16 sector components finished in the red. Life360 and Xero were worst hit, falling 9.6% and 9.1%, respectively.

The heavyweight financial and materials sectors both lost 2.0% as all but 15 ASX 200 components lost ground.

It was the ASX 200's third consecutive weekly loss, matching a January streak as the worst of 2022.

Macquarie Group fell 8.0% to a two-month low of $186.90 after cautioning it would be tough to maintain current growth levels in view of market volatility and rising interest rates. Still, the diversified financial giant delivered a record profit for fiscal 2022.

News Corp's ASX-listed shares were down 7.8% to $26.60 despite the media giant announcing third-quarter net income was up eight per cent to US$104 million.

In commodity markets, gold futures gained 0.4% to $US1882.80 an ounce; Brent crude oil added 1.3% to $US112.39 a barrel; iron ore fell 4.7% to US$139 a tonne.

Bonds resumed their selloff. The yield on the Australian 2 Year government bond rose to 2.72% while the 10 Year bounced to 3.46%. Overseas, yields on US Treasury 2 Years gained to 2.73%, while the 10 Year popped to 3.13%.

The Australian dollar edged lower, buying 70.75 US cents as of last trade on Saturday, down from the previous close of 71.10. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, rose to 96.14.

Asia

Chinese stocks ended the session lower, following broad declines in regional Asian equities and steep losses on Wall Street overnight. The downturn comes after US Treasury yields rebounded, which usually draws funding away from the stock market. The benchmark Shanghai Composite Index fell 2.2% to settle at 3001.56, while the Shenzhen Composite Index drops 1.7% to 1859.39. The ChiNext Price Index slid 1.9% to 2244.97. Tourism-related companies, including travel agencies, attraction-site operators, airlines and airports, led the losses, after Beijing signalled its intention to stick to its zero-Covid policy.

Hong Kong stocks ended the session lower, following losses in Asia's regional equities markets as well as an overnight downturn on Wall Street. The benchmark Hang Seng Index fell 3.8%, marking its largest one-day decline in two months to settle at 20001.96. Consumer-goods companies led losses amid rising worries over China's consumption downturn after Beijing signalled intentions to stick to its zero-Covid policy. China Res Beer plunged 10%, Budweiser Brewing slumped 7.6% and Li Ning slid 7.3%.

Japanese stocks ended higher, led by gains in energy and power stocks as hopes grow for nuclear-reactor restarts following recent gains in crude oil prices. Tokyo Electric Power Co. Holdings jumped 16% and Kansai Electric Power gained 5.1%. Oil explorer Inpex climbed 4.9%. The Nikkei Stock Average rose 0.7% to 27003.56. Earnings are in focus.

Europe

European stocks closed lower as investors digested April's US nonfarm payrolls report and assessed the implications of policy tightening by the Federal Reserve and other central banks. The pan-European Stoxx Europe 600 fell 1.9%, the German DAX decreased 1.6% and the French CAC 40 shed 1.7%.

"From today's job data it is clear that the US economy continues to motor ahead, and while wage growth might not have been as strong as expected, the overall picture continues to support the Fed's plan for further tightening of policy," IG analyst Chris Beauchamp says in a note.

Investors continued to fret about the possibility of a recession in the US and elsewhere caused by monetary policy tightening, he says.

London’s FTSE 100 ended the week down 1.5%, with IG saying "Earnings season has done little to assuage concerns about pressured consumer spending, leaving markets on the back foot once again.”

North America

Stocks ended a wild week with modest declines, extending a selloff that has dragged the S&P 500 to its longest weekly losing streak in more than a decade.

The major indexes have swung wildly in recent sessions as investors have tried to gauge the impact of the Federal Reserve's plan to raise interest rates on the economy. Many investors find themselves caught between competing hopes: that rate increases will be significant enough to tame rapidly rising inflation, but not so large that they will derail economic growth.

Those worries, alongside rapidly rising yields in the government bond market, have hit shares of technology and growth stocks especially hard as investors re-evaluate the once-highflying group.

The S&P 500 on Friday shed 0.6%, capping a fifth consecutive week of losses, the longest streak since June 2011. The technology-heavy Nasdaq Composite lost 1.4%. The Dow Jones Industrial Average lost 0.3%, after slumping more than 1,000 points Thursday, its worst day since 2020.

Although the impact of rising rates has rippled through the stock market for much of the year, the selling has taken on fresh intensity in recent days. Stocks have recorded some of their steepest one-day drops since 2020, extending their losses from April. That's left investors grappling with an extended selloff that bears little resemblance to the historically short and severe stock-market crash of March 2020.

Adding to the pain for many investors: Stocks and bonds have recorded big, simultaneous losses. In bond markets, the yield on the benchmark 10-year US Treasury note rose to 3.124%, the highest level since November 2018. Bond yields rise as prices fall.

At times this week, people appeared to be selling everything, said Danny Kirsch, head of options at Piper Sandler. It's a "go to cash," mentality, he said. "Nothing's working."

All three major indexes notched modest weekly losses, though the tech-heavy Nasdaq continued to underperform its peers. The S&P 500 and Dow shed 0.2% each for the week. The Nasdaq fell 1.5%, its fifth weekly loss of at least 1%--the longest such stretch since August 2002, according to Dow Jones Market Data.

At times in recent weeks, investors have stepped back in to pick up stocks at a discount, helping stabilize the market. But the gains so far have been short-lived, and the indexes have continued to trade near their lows of the year.

The S&P 500 has fallen 13% in 2022; the Dow is off 9.5%; and the Nasdaq has lost 22%.

"Investors, in some ways, may have forgotten what corrections felt like, " said Mike Bailey, director of research at FBB Capital Partners. "Some of them may just want out."

Stocks soared Wednesday after the Federal Reserve raised interest rates by half a percentage point, buoyed by relief that it wasn't actively considering even larger increases in the future, but that relief faded Thursday and Friday as investors reassessed the outlook for stocks, leading to a punishing selloff that caught many investors off guard.

Matt Rowe, executive director of global markets at Nomura, said some of his clients were dumping stocks rather than opting to put on stock hedges through the derivatives markets.

"We have seen net and gross risk reduction as opposed to hedging," Mr. Rowe said. "Before you think about hedging something, do you really want to own it to begin with?"

More than 95% of the S&P 500's constituents dropped Thursday, for example, for the third time in three weeks--a frequency that hasn't been seen since March 2020, according to Susquehanna Financial Group.

The volatility continued early Friday. Futures briefly turned higher following the release of a strong April jobs report, before resuming their slide. Some investors said the report was outweighed by worries about the Fed's rate path.

The latest jobs report showed that the US economy added 428,000 jobs in April and that the unemployment rate remained unchanged at 3.6%. Economists surveyed by The Wall Street Journal had projected that 400,000 jobs were created in April and that the unemployment rate fell to 3.5% -- where it stood just before the pandemic and a five-decade low.

The strong jobs report "could also mean that the Fed has a little bit more leeway to be aggressive," said Amy Kong, chief investment officer at Barrett Asset Management.

In corporate news, DoorDash shares lost $1.04, or 1.4% to $72.11 after the food-delivery company reported a rise in quarterly revenue late Thursday, though its rate of growth for the quarter slowed. Shares of Under Armour's Class A shares tumbled $3.40, or 24% to $10.89 after it said Covid-related supply-chain pressures hurt its sales in the latest quarter. It warned that the issues weren't going away soon.

DraftKings shares lost $1.29, or 8.9% to $13.15 after the company said first-quarter sales rose but its loss kept widening as it sought to attract customers.

Brent crude, the global oil benchmark, rose 4.9% this week to $112.39 a barrel, extending a recent run of gains driven by expectations that the European Union was set to ban imports of Russia's oil in response to its invasion of Ukraine. Gold prices fell 1.5% this week to $1881.20 a troy ounce.