Australia

Australian shares are set to open flat today. US indices ended Friday mixed as investors continued to fret over interest rate policy, jobs data, and corporate earnings.

ASX futures were unchanged as of 8:00am on Saturday.

US stocks swung between small gains and losses on Friday, capping a week in which this year's investor optimism about the direction of the economy faced its first test.

The S&P 500 fell in early trading, then inched up before moving in a tight range for the rest of the day. It closed 0.2% higher, but still turned in a 1.1% decline for the week, its worst weekly performance so far this year. The Dow Jones Industrial Average rose 0.5% while the Nasdaq Composite was down 0.6%. All three indices finished the week lower, the first time that has happened since December. The Nasdaq snapped a five-week winning streak with its 2.4% decline.

The S&P 500 had already dropped 1.3% in the first four sessions of this week, putting it on course for its poorest weekly performance since mid-December, when it fell 2.1%.

Markets seemed to be digesting the previous week's news, which included the Federal Reserve's 0.25 percentage point increase and a surprisingly strong jobs report. With the fourth-quarter earnings season more than halfway through, fewer companies than normal are topping Wall Street profit expectations. Shares of ride-hailing company Lyft Inc. fell 36% on Friday after it reported its results.

Asia

Shares in China ended lower as some investors reevaluated the Chinese economy's rebound after Beijing scrapped its strict Covid-related restrictions. "While most [investors] agree that overall economic growth will recover in China this year, there appears to be a lack of conviction on the magnitude of that rebound," Stephen Innes, Managing Partner at SPI Asset Management, said in a note. Auto manufacturers led the laggards. BYD Co. is down 2.2% after Berkshire Hathaway cut its stake in the company, its ninth time offloading since it started selling BYD's shares in August. Consumption-related companies and property stocks rose, with Gemdale Corp. increasing 1.9% and Shanghai Jahwa United rising 1.5%. The Shanghai Composite Index declined 0.3% to 3260.67 and finished the week 0.1% lower. The Shenzhen Composite Index lost 0.4% and the ChiNext Price Index was down 1.0%.

Hong Kong's Hang Seng Index extended early losses to end 2.0% lower at 21190.42, as worries over interest rates persisted ahead of next week's US January inflation report. Tech stocks led losses, with Baidu losing 7.4%, JD.com falling 6.3% and Alibaba Group dropping 3.3%. Among consumer stocks, Anta Sports slipped 5.0% and Li Ning was 4.0% lower. BYD Co. declined 3.5%.

Japan's Nikkei Stock Average rose 0.3% to close at 27670.98 amid hopes for the Bank of Japan to maintain its accommodative monetary policy. Friday’s lower-than-expected reading for Japan’s January producer prices may relieve some pressure for the BOJ to adopt more aggressive tweaks to its policy, Yeap Jun Rong, market analyst at IG, said in an email. Tokyo Electron climbed 4.3% after it raised fiscal-year revenue and net profit views. Nippon Steel added 4.5% after its nine-month net profit rose 1.8% on year.

Indian stocks ended lower, finishing the week with range-bound trading, as investors weighed a mixed bag of signals, especially uncertainties over the direction of the Fed's future monetary policy and the state of global economies. The benchmark Sensex index edged down 0.2% to settle at 60682.70. A wide range of sectors weighed on the market, with IT-services providers HCL Technologies dropping 2.8%, steel maker Tata Steel down 2.2% and lender ICICI Bank shedding 0.8%. Strength in the auto sector offset losses to some extent, as Tata Motors gained 2.05% and Maruti Suzuki inched up 0.1%.

Europe

European stocks fell Friday as the prospect of higher-for-longer interest rates weighed on investor sentiment. The pan-European Stoxx Europe 600 fell 1%, the German DAX declined 1.4%, and the French CAC 40 retreated 0.8%.

"European equities traded definitively lower on Friday as markets absorbed the notion that rates may stay higher for longer and more thoroughly," SPI Asset Management managing partner Stephen Innes said in a note.

London’s benchmark FTSE 100 index lost 0.4% Friday as UK GDP numbers showed the economy stagnated in 2022's final quarter, CMC Markets analyst Michael Hewson said in a note.

Although European markets had a good start to the year, "it looks time to hand back some of those gains as economic pessimism rises again," said IG analyst Chris Beauchamp. Ocado was Friday's biggest faller, down 11%, followed by Standard Chartered, and Smurfit Kappa, down 5% and 4.6% respectively. Shell, BP, and AstraZeneca were the session's biggest risers, up 3%, 2.6% and 1.8% respectively.

North America

US stocks swung between small gains and losses on Friday, capping a week in which this year's investor optimism about the direction of the economy faced its first test.

The S&P 500 fell in early trading, then inched up before moving in a tight range for the rest of the day. It closed 0.2% higher, but still turned in a 1.1% decline for the week, its worst weekly performance so far this year. The Dow Jones Industrial Average rose 0.5% while the Nasdaq Composite was down 0.6%. All three indices finished the week lower, the first time that has happened since December. The Nasdaq snapped a five-week winning streak with its 2.4% decline.

The S&P 500 had already dropped 1.3% in the first four sessions of this week, putting it on course for its poorest weekly performance since mid-December, when it fell 2.1%.

Markets seemed to be digesting the previous week's news, which included the Federal Reserve's 0.25 percentage point increase and a surprisingly strong jobs report. With the fourth-quarter earnings season more than halfway through, fewer companies than normal are topping Wall Street profit expectations. Shares of ride-hailing company Lyft Inc. fell 36% on Friday after it reported its results.

"The market had come close to pricing in a flawless landing, where inflation recedes and the economy still grows,” said Bill Merz, head of capital markets research at US Bank Wealth Management. "We see reason for some degree of caution."

Some investors said last week that the Feb. 3 jobs report raised the possibility that tightening could last longer than they had hoped. The US added 517,000 jobs last month, far more than analysts were expecting, and the unemployment rate of 3.4% was the lowest since 1969.

Fed Chair Jerome Powell said Tuesday that the process of lowering inflation to the central bank's goal of 2% "is likely to take quite a bit of time." Markets rallied after his speech but have since declined.

Last week marked a turnaround for stocks, which had a strong start to the year. All three indices finished January higher, including an 11% rise in the Nasdaq, mostly because investors had expected the Fed to end its campaign to raise interest rates and, eventually, lower them. Last week's moves signaled investor doubts that the Fed can reduce inflation without slowing down the economy.

"Sentiment has soured a bit," said Sebastian Mackay, a multi-asset fund manager at Invesco. "The market was confident that we would be looking at interest rate cuts later this year, but the strong jobs data has thrown a spanner in the works."

Investors will soon receive more information about the health of the consumer and the direction of interest rates. Consumer-price data for January is expected next week, while Coca-Cola Co., Marriott International and Kraft Heinz are among the companies scheduled to report fourth-quarter results.

"The market is nervous about confirmation from the CPI report that more work needs to be done before the Fed can ease off the gas pedal," said Keith Buchanan, portfolio manager at Globalt Investments.

So far this earnings season, 58 companies have issued a negative profit outlook for the first quarter, according to FactSet. Just 13 have issued a forecast that topped analyst expectations. About 70% of S&P 500 companies have reported results.