Fed Rate Hike Expectations Ease as US Jobs Numbers Disappoint

European stocks rallied on Friday as investors reacted to softer-than-expected US non-farm payrolls data. The latest report from the Bureau of Labor Statistics showed that the economy added far fewer jobs than expected in September, with payrolls rising by 29,000 and the unemployment rate ticking up to 4.2% from 4.1%. This was a significant deviation from the forecasted increase of 84,000 jobs last month.

The data also revealed that employment in construction, manufacturing, and financial activities was little changed. Susannah Streeter, chief investment strategist at Wealth Club, noted that 'there's been a ripple of relief on financial markets as hopes rise that the Fed won't have to go so hard and fast in raising interest rates.'

The eurozone inflation rate rose to 3.8% in September from 3.2% in August, with energy prices driving the increase by 18.8% year-on-year. However, investors seemed unfazed by this news, as European stocks continued to climb.