Global stocks slide as Ukraine war shakes markets

Data showing a vibrant US jobs market strengthened the dollar and spurred commodity prices higher, but the war in Ukraine overshadowed the blowout report as the euro plunged on the worsening outlook for slower European economic growth.

The US unemployment rate fell to a two-year low of 3.8 per cent as job growth surged in February, a bright spot for an economy that faces mounting headwinds from rising inflation, tighter monetary policy by the Federal Reserve and geopolitical tensions.

The euro tumbled below $1.10 for the first time in almost two years and hit a fresh seven-year low against the safe-haven Swiss franc as Russian forces seized the largest nuclear power plant in Europe and fighting raged elsewhere in Ukraine.

European stocks sank to near one-year lows, with the pan-regional STOXX 600 index (.STOXX) sliding 3.56 per cent to increase losses for the week to 7 per cent - its worst weekly decline since the depths of a pandemic-fueled sell-off in March 2020.

The major US stock indices declined less as Europe's dependence on Russian energy and its proximity to Ukraine has slammed the continent more than other parts of the globe.

If it were not for Russia's invasion of Ukraine, the Federal Reserve would likely raise interest rates by 50 basis points at its policy meeting in two weeks, said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.

The jobs data is a blowout number but it doesn't ease Fed Chair Jerome Powell's job as he raises interest rates to tame inflation as the economy slows, Kinahan said.

"He has a tough needle to thread here, in terms of making sure that tighter money doesn't upset what's already a very fragile situation," he said.

On Wall Street, the Dow Jones Industrial Average (.DJI) fell 0.53 per cent, the S&P 500 (.SPX) lost 0.79 per cent and the Nasdaq Composite (.IXIC) dropped 1.66 per cent.

MSCI's gauge of stocks across the globe (.MIWD00000PUS) closed down 1.65 per cent.

The dollar rose more than 1 per cent against a basket of six trading currencies at one point. A key measure of economic expectations, the gap between yields on two- and 10-year Treasury notes , flattened to under 25 basis points.

A flattening curve can mean investors expect rate hikes soon and are losing confidence in the economic growth outlook.