European Stocks Close Lower As Strong U.S. Jobs Data Fuels Interest Rate Concerns

European stocks closed lower on Friday after stronger-than-expected U.S. jobs data raised concerns that the Federal Reserve will hold interest rates at current levels for longer. Higher Euro zone bond yields, and potential tariff hikes by the U.S. weighed as well on investor sentiment.

Data from the Labor Department showed U.S. non-farm payroll employment surged by 256,000 in December, after jumping by a downwardly revised 212,000 jobs in November.

Economists had expected employment to climb by 160,000 jobs compared to the addition of 227,000 jobs originally reported for the previous month.

The unemployment rate in the U.S. edged down to 4.1% in December from 4.2% in November. The rate was expected to come in unchanged.

The pan European Stoxx 600 closed down 0.84%. The U.K.’s FTSE 100 ended 0.86% down, Germany’s DAX lost 0.5% and France’s CAC 40 fell 0.79%. Switzerland’s SMI ended with a loss of 1.13%.

Among other markets in Europe, Belgium, Finland, Greece, Ireland, Netherlands, Portugal, Spain, Sweden and Turkiye closed weak.

Austria, Denmark, Iceland, Norway, Poland and Russia ended higher.

In the UK market, Schrodders, Sainsbury (J), Diageo, Beazley, Croda International, BT Group, Marks & Spencer, Barclays Group, Prudential, Haleon, Hiscox, Natwest Group and Tesco lost 2 to 4.5%.

Intercontinental Hotels, Standard Chartered, IAG, Scottish Mortgage, Centrica, BP and Reckitt Benckiser gained 0.5 to 1.5%.

In the German market, Zalando closed more than 5% down. E.ON and Siemens Energy lost about 4.7% and 4.3%, respectively.

Daimler Truck Holding, Munich, Vonovia, Allianz, Hannover Rueck, Brenntag, Siemens, Puma, BASF and Porsch closed lower by 1 to 2.5%.

Mercedes-Benz rallied nearly 4% and Bayer gained about 1.5%. BMW, Volkswagen, Fresenius Medical Care, Siemens Healthineers, MTU Aero Engines and Sartorius advanced 0.6 to 1%.

In the French market, Pernod Ricard closed nearly 4% down. Teleperformance, Schneider Electric, Veolia, L’Oreal, Saint-Gobain, Dassault Systemes, STMicroElectronics, Edenred, AXA, BNP Paribas and Stellantis lost 1 to 2.2%.

ArcelorMittal climbed about 1.7%. Publicis Groupe gained nearly 1%, while Orange, Thales and Airbus Group posted modest gains.

Data released by the statistical office INSEE showed that France’s industrial production grew 0.2% in November from October, when it was down 0.3%. Economists had forecast a monthly fall of 0.1%. Similarly, manufacturing output expanded 0.2 percent, partially offsetting the 0.1% drop a month ago.

A separate report from INSEE said France consumer spending rebounded in November on rising engineered goods and food consumption. The report said household consumption advanced unexpectedly by 0.3% on a monthly basis, offsetting the revised 0.3% fall in October. Spending was forecast to edge up 0.1%.