Tech Stocks Lift Global Markets as Rate-Hike Fears Ease

Global equities rose Friday as investors took a weaker-than-expected U.S. jobs report as a sign that the Federal Reserve may have less pressure to raise rates near term.

Tech and chip stocks led the move, with gains concentrated in Asia and Europe. South Korea’s KOSPI jumped about 5.8% as SK Hynix and Samsung Electronics rebounded sharply after recent volatility. In Europe, the Stoxx Europe 600 edged up about 0.1% in afternoon trading, while ASML rose about 3.1%.

Softer jobs data

The catalyst was the U.S. June employment report released Thursday. The Bureau of Labor Statistics said payrolls rose by 57,000, below expectations, while the unemployment rate fell to 4.2%.

April and May payroll figures were also revised down by a combined 74,000 jobs. Market participants read the report as cooling near-term rate-hike concerns, even as some economists cautioned that inflation data remains the main guide for Fed policy.

Asia and Europe lead

The reaction was strongest in South Korea, where the KOSPI’s rebound was powered by chipmakers. SK Hynix and Samsung Electronics were the main drivers of the move after a sharp selloff in the previous session.

European investors followed a similar pattern, with technology shares steadier after recent pressure. ASML helped lead the recovery in the region’s chip complex.

What comes next

The question now is whether rate expectations keep drifting away from a July hike and whether the rally holds when U.S. markets reopen after the July 4 holiday.

Investors will also watch for any comments from Federal Reserve officials and for follow-through in U.S. semiconductor stocks, which could mirror the overseas move.