European Markets Close in the Red Following Strong US Jobs Report (2025-09-06)
- Why Did European Markets Drop Today?
- How Did Sector Performances Vary?
- What’s the Historical Context?
- FAQ: Your Burning Questions Answered
European stock markets slumped into negative territory on September 6, 2025, as investors reacted to a stronger-than-expected US employment report. The data reignited fears of prolonged high interest rates, sending shockwaves across global markets. This article breaks down the day’s events, analyzes key drivers, and explores what it means for traders. ---
Why Did European Markets Drop Today?
The FTSE 100, DAX, and CAC 40 all closed down between 1.2% and 1.8% after the US Labor Department reported 235,000 new jobs in August—well above forecasts. "Markets were pricing in a dovish Fed pivot by Q4, but this jobs number throws cold water on that," noted BTCC analyst David Müller. The euro also weakened to $1.07, a three-week low, as Treasury yields spiked.
How Did Sector Performances Vary?
Banking stocks were hit hardest (-2.4% sector average) due to margin concerns, while defensive plays like healthcare saw modest gains. Interestingly, bitcoin briefly rallied 3% as some investors hedged with crypto—though BTCC exchange volumes remained below their 2024 peaks.
---What’s the Historical Context?
This marks Europe’s 5th straight weekly decline, echoing similar patterns from 2018 and 2021 when Fed tightening rattled global equities. As TradingView data shows, the Stoxx 600’s P/E ratio (14.2) is now below its 10-year average—but is it cheap enough? "Valuations aren’t the issue; it’s the uncertainty around rate duration," argued a Deutsche Bank strategist.
---FAQ: Your Burning Questions Answered
Which European indices fell the most?
Italy’s FTSE MIB (-2.1%) and Germany’s DAX (-1.8%) led losses, while the UK’s FTSE 100 (-1.3%) slightly outperformed.
Could this impact ECB policy?
Unlikely. The ECB remains focused on Eurozone inflation (currently 2.6%), though today’s moves may delay any rate cuts until 2026.
