Stocks pull back after rally with jobs data eyed, yields climb
Major US averages fall
Gold retreats after hitting record high
Oil down more than 1%
Updated at 2:30 p.m. ET/ 1918 GMT
By Chuck Mikolajczak
NEW YORK, Dec 4 (Reuters) -A gauge of global stocks fell for the first time in five sessions on Monday while Treasury yields rose as investors awaitedU.S. labor market data to gauge the likely routeof the Federal Reserve's rate policy.
Softening economic data and recent comments from Fed officials, including Chair Jerome Powell, have heightenedexpectations that the U.S. central bankhas ended its interest-rate-hiking cycle and willbegin to cut rates as soon as March.
Expectations for a U.S. rate cut of at least 25 basis points (bps) in March are about 58%, according to CME's FedWatch Tool, up from about 22% a week ago.
Expectations that theFed will ease policyhave helped fuel a strong rally in U.S. stocks. Each of the three major indexes on Wall Street cappeda fifth straight week of gains on Friday, with the benchmark S&P index notching its highest close of the year.
"No one expects any more rate hikes at this point," said Joe Saluzzi, partner and co-founder at Themis Trading in Chatham, New Jersey.
But, he added, "I don't see them cutting unless you start to see some really significant poor numbers coming into the economy, which we haven't seen yet."
The Dow Jones Industrial Average .DJI fell 75.40 points, or 0.21%, to 36,169.92; the S&P 500.SPX lost 32.30 points, or 0.70%, to 4,562.33; and the .IXIC lost 154.11 points, or 1.08%, to 14,150.92.
U.S. labor market data will kick off on Wednesday with the ADP National Employment Report on the private sector andculminate on Friday with the government's wider payrollsreport.
Data on Monday showed new orders for U.S.-made goodsfell more than expected in October, marking the biggest monthly drop in roughly three and a half years,
Stocks in Europe also edged lower, with the pan-European STOXX 600 index .STOXX closing down0.09% after initial gains pushed it toa four-month high. MSCI's gauge of stocks across the globe .MIWD00000PUS was down 0.56% after hitting itshighest level since Aug.2 earlier in the day.
Attacks on commercial vessels in the Red Sea on Sunday risked increasing investor worries about the potential for a widening of the war between Israel and Hamas, potentially complicating the outlook for a rally that saw U.S. stocks crest a fresh closing high for the year last week.
Crude prices were lower as investor skepticism over the latest OPEC+ decision on supply cuts and uncertainty surrounding global fuel demand outweighed the risk of supply disruptions from the Middle east conflict.
U.S. crude CLc1 settled down 1.39% to $73.04a barrel. Brent crude LCOc1 settled at $78.03 per barrel, down 1.08%.
The dollar rebounded, bouncing after three straight weeks of declines. The dollar index .DXY, which tracks the greenback against a basket of six currencies, gained0.61%,to 103.73. The euro EUR= was down 0.55%at $1.0821.
The bounce in the dollar weighed on gold, which pulled back after hitting a record high of $2,135.40 per ounce and was last down 2.13% to $2,026.89 an ounce.
U.S. Treasury yields moved higher, with the benchmark 10-year yield US10YT=RR moving off three-month lows to stand7 basis points higher at4.29%. The two-year US2YT=RR U.S. Treasury yield, which typically moves in step with interest rate expectations, rose 3 basis points to 4.47%.
US government bond yields tumbled in November US government bond yields tumbled in November https://tmsnrt.rs/3T7W1DW
Reporting by Chuck Mikolajczak; additional reporting by Amruta Khandekar and Shristi Achar A in Bengaluru; editing by Christina Fincher and Leslie Adler
To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA
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