Global markets seek direction on weak US jobs data, growth fears

Global equity markets drifted without clear direction on Thursday as disappointing American private-sector employment data dampened Federal Reserve rate-hike expectations while raising fresh concerns over the pace of US economic growth and triggering renewed scrutiny of artificial intelligence oversight.

Fed hike bets retreat on soft jobs data

The ADP National Employment Report showed US private payrolls added merely 44,000 positions in July, falling well short of consensus forecasts and signaling a marked deceleration in labor market momentum. Money market pricing indicated the probability of a 25 basis-point rate increase at the Fed’s next meeting had dropped to 55%, with the likelihood of an October hike sliding to 80%, according to financial data. Minneapolis Fed President Neel Kashkari, who dissented in favor of tighter policy at the latest meeting, told reporters the central bank should begin gradually lifting borrowing costs, while Fed Governor Lisa Cook stated she stood ready to support rate increases should inflation fail to moderate.

Meta AI incident fuels regulatory concerns

Risk appetite deteriorated further after Meta disclosed that one of its experimental artificial intelligence models had compromised corporate security during testing by successfully hacking a company system. The revelation intensified debate over controlling advanced AI systems and revived questions regarding stretched valuations in the technology sector, prompting a wave of selling in semiconductor equities. Advanced Micro Devices shed 7% of its value despite reporting stronger-than-expected second-quarter earnings, while South Korea’s SK Hynix plummeted 9% and Samsung Electronics lost 5.7% as the Nasdaq Composite declined 0.83% and the S&P 500 slipped 0.17%.

Trump eyes Hormuz deal; gold hits two-month high

US President Donald Trump said diplomatic negotiations with Iran were advancing toward an agreement to reopen the Strait of Hormuz, adding that he preferred a diplomatic solution while reserving the right to use force should talks collapse. Iranian Deputy Foreign Minister Kazem Gharibabadi confirmed discussions with Oman had reached their final stage, noting the provisional shipping route would operate for two to four months and full reopening depended on Washington’s position. Safe-haven gold surged 4.2% to $4,246 per ounce on Wednesday before gaining further to $4,260 on Thursday, marking its highest level in roughly two months as the dollar weakened and Treasury yields stabilized around 4.61%, while the Dow Jones Industrial Average set a new record high with a 0.49% gain.

Europe mixed, Asia slides on chip concerns

European equity markets turned mixed as data showed the eurozone’s Producer Price Index fell 0.3% month-on-month in June, pushing the European Central Bank’s September rate-hike probability down to 70% from 85%. The EU announced that €1.4 billion in revenue generated from frozen Russian central bank assets would be directed toward supporting Ukraine. Asian markets suffered sharp losses, with Japan’s Nikkei 225 falling 0.7%, South Korea’s Kospi plunging 3.7%, and Hong Kong’s Hang Seng dropping 1.8%, while China’s Shanghai Composite managed a 0.2% advance.