Global Financial Markets in Flux: Gold and Stocks React to U.S. Job Data and Fed Speculation

U.S. stocks surged to record highs on Friday but quickly reversed as disappointing job growth data for August sparked expectations of a significant interest rate cut by the Federal Reserve. The data led to increased anticipation of a rate cut of up to 50 basis points in the upcoming Fed meeting.

The prospect of lower rates caused a drop in Treasury yields and pressured the U.S. dollar. The dollar's decline bolstered gold, which surged to a near-record high of $3,600 an ounce. Concerns over global financial stability were heightened by this volatility, especially in the wake of weaker-than-expected U.S. labor market numbers.

Across the Atlantic, European markets followed suit with modest fluctuations. Investor sentiment was strained amid expectations of tightening conditions in various financial sectors, while oil prices fell for a third consecutive day as OPEC prepared for a critical meeting.

(With inputs from agencies.)