NEW YORK - US stocks ended lower on Friday as traders digested a mixed employment report, while bourses in Europe and Asia advanced.
The United States added 187,000 jobs last month, below the 200,000 expected by analysts but roughly steady with revised June figures.
The data added to encouraging signs that the Federal Reserve's aggressive interest rate hikes to ease demand may bring down inflation without triggering a major recession -- and that it may decide to hold rates steady at the next policy meeting in September.
"A mixed US jobs report appears to have stabilized sentiment," said CMC Markets analyst Michael Hewson while European and Asian markets logged gains.
Friday's downward revisions to job gains in May and June "spoke to the idea that central bank rate hikes have done their job, and that no more are coming," Hewson added.
But robust wage growth supported the argument that the Fed could hold rates higher for longer.
The US unemployment rate came in at 3.5 percent, below June's 3.6 percent figure and at a historically low level.
And average hourly earnings rose 0.4 percent in July, the same pace as the month before but above expectations.
"The key takeaway from the report is that labor supply continues to be tight, which could make it difficult to achieve a more Fed-pleasing moderation in wage growth," said Briefing.com analyst Patrick O'Hare.
"That might not translate into another increase in the target range for the fed funds rate, but it does fit the notion that the Fed will be inclined to keep the policy rate higher for longer," he added.
Wall Street's main indices slumped to end the day, with the Dow losing 0.4 percent and the broader S&P 500 sliding 0.5 percent. The tech-heavy Nasdaq dipped 0.4 percent.
Europe's main equity markets ended the day higher.
Meanwhile the dollar fell against its major rivals after the US jobs numbers were announced.
Equities had slid midweek after Fitch stripped the United States of its top credit rating, seeing investors switch to haven assets such as the dollar, yen and government bonds.
Positive earnings also helped to offset debt concerns in the world's biggest economy.