European stocks opened lower on Thursday following three consecutive declines in September, with the Stoxx 600 index sliding after closing above 525 points last Friday. Market sentiment has been negatively impacted by weaker-than-expected U.S. economic data, particularly from manufacturing surveys and jobs openings, sparking concerns of a potential slowdown in the world’s largest economy. This has reignited debate over whether the Federal Reserve might cut interest rates by 50 basis points, rather than the anticipated 25 basis points, at its next meeting.
Investors are now closely monitoring upcoming U.S. jobs data, with initial jobless claims set for release on Thursday and the highly anticipated nonfarm payrolls and unemployment rate reports on Friday. A weaker-than-expected jobs report in July had contributed to a broad sell-off at the beginning of August, raising fears of an economic slowdown. However, some analysts, including George Lagarias, chief economist at Forvis Mazars, suggest that while a slowdown is evident, the U.S. economy is still far from entering a recession, implying that the Federal Reserve may avoid aggressive rate cuts.
In addition to the jobs data, the technology sector has weighed heavily on European markets this week, with a 3.2% drop in tech stocks on Wednesday. U.S. chipmaker Nvidia saw a sharp decline earlier this week, dragging down global chip stocks, though the company denied reports of a Department of Justice subpoena related to antitrust issues.
Meanwhile, Wall Street index futures were relatively stable early Thursday after a volatile start to the month. In Asia-Pacific markets, losses continued, with Japan’s Nikkei 225 posting the steepest decline amid softer wage growth in August, potentially providing the Bank of Japan with more room to consider a rate hike.