Global stock markets plunged and bond yields soared on Friday after US data showing the strongest annual wage growth since 2009.
Yields on the benchmark 10-year US Treasury note shot up to a four-year high, just minutes after the release of a Labour Department unemployment report for January.
A gain of 200,000 jobs last month and annualized increase in average hourly earnings to 2.9 per cent led the dollar to surge against the yen, the euro and a basket of six currencies, reports Reuters.
The price of the US 10-year note later fell further, pushing the yield up as high as 2.854 per cent from 2.773 per cent late on Thursday.
The Dow Jones Industrial Average fell 665.75 points, or 2.54 per cent, to 25,520.96. The S&P 500 lost 59.85 points, or 2.12 per cent, to 2,762.13 and the Nasdaq Composite dropped 144.92 points, or 1.96 per cent, to 7,240.95.
Oil majors Exxon and Chevron fell 5.1 per cent and 5.6 per cent, respectively.
MSCI’s all-country world index of equity performance in 47 countries fell 1.8 per cent while its gauge of emerging market stocks lost 1.43 per cent.
The pan-European FTSEurofirst 300 index of leading regional shares closed down 1.37 per cent and the blue-chip FTSE 100 index in London closed down 0.63 per cent.
The dollar index rose 0.59 per cent, with the euro down 0.38 per cent to $1.2460. The Japanese yen weakened 0.64 per cent versus the greenback at 110.12 per dollar.
US West Texas Intermediate (WTI) crude settled down 35 cents to $65.45 a barrel. Brent lost $1.07 to $68.58. The deep decline in Brent cut the gap between it and WTI to its narrowest since August.
US gold futures for April delivery settled down $10.60, or 0.8 per cent, at $1,337.30.