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Asian and European markets were mixed Thursday after the turmoil of the previous day as traders assess the outlook for US interest rate cuts and another set of below-par data put extra focus on the upcoming jobs report.
Equities endured on Wednesday the most tumultuous day since early August after a weak read on US factory activity combined with a collapse in tech firms to cause a rout across the board.
While some of the selling was put down to profit-taking, news that the manufacturing sector contracted for a fifth straight month revived worries that the world's top economy could tip into recession.
A big miss on labour creation in July was one of the catalysts for last month's bloodbath.
Figures on Wednesday showed job openings fell to their lowest level since the start of 2021, stoking the sense that the economy and labour market are not as strong as thought.
With the Fed widely expected to cut rates at its meeting next month, observers said the recent figures are making a strong case for a 50-basis-point reduction, as opposed to the 25 points largely expected.
"Given that September historically claims the title of the worst month for stock returns -- with August a close runner-up -- this seasonal swoon could just be par for the course," said analyst Stephen Innes.
"And yet, there's always that lingering worry that the sharp pullback from near-record highs might signal something deeper. Enter this week's critical US employment report, coupled with (Wednesday's job openings) data, which threw another wrench into the mix."
He pointed out that the job openings report also showed a downward revision for June, "adding to growing evidence that the US labour market is finally cooling."
"While that's a positive in terms of easing wage pressures and keeping inflation in check, it also raises questions about the economy's underlying strength."
While Wall Street struggled for a second day -- only the Dow ended in positive territory -- Asia mostly eked out gains though many markets drifted in and out through the morning.
Tokyo fell as exporters were weighed by a strengthening yen, while there were also losses in Hong Kong, Seoul, Singapore and Mumbai.
Shanghai, Sydney, Wellington, Taipei, Manila and Bangkok all rose.
London and Frankfurt edged up but Paris dipped.
Kelvin Wong at OANDA warned that "the hard-landing playbook narrative is back at the forefront as the market participants are 'fearful' that the US Federal Reserve has been late in enacting the interest rate cut cycle in the US.
"In turn, the higher beta (mega-cap technology and semiconductor stocks) were the worst performers as these groups of stocks have been leading in the US stock market since the start of 2024."
Dealers are keeping an eye on developments in China after a report said officials were considering cutting interest rates on more than $5 trillion of mortgages in a bid to support homeowners and ease pressure on the banking system.
Tokyo - Nikkei 225: DOWN 1.1 percent at 36,657.09 (close)
Hong Kong - Hang Seng Index: DOWN 0.1 percent at 17,444.30 (close)
Shanghai - Composite: UP 0.1 percent at 2,788.31 (close)
London - FTSE 100: UP 0.1 percent at 8,276.81
Dollar/yen: DOWN at 143.64 yen from 143.72 yen on Wednesday
Euro/dollar: UP at $1.1085 from $1.1082
Pound/dollar: DOWN at $1.3145 from $1.3147
Euro/pound: UP at 84.33 pence from 84.29 pence
West Texas Intermediate: UP 0.5 percent at $69.53 per barrel
Brent North Sea Crude: UP 0.6 percent at $73.10 per barrel
New York - Dow: UP 0.1 percent at 40,974.97 (close)
dan/ssy