US stocks rebounded on Friday following encouraging jobs numbers, while oil prices jumped further.
The US economy added a better-than-expected 379,000 jobs in February, while average hourly earnings rose only a modest 0.2 percent as analysts had forecast.
"The key takeaway from the report is that it will be seen as a sign of even better things to come for the labor market, which bodes well for growth prospects," said analyst Patrick J. O'Hare at Briefing.com.
Shortly after the opening bell, the Dow was 1.0 percent higher. The broader S&P 500 and tech-heavy Nasdaq also rose.
European stocks erased earlier losses after the US jobs numbers were released.
US stocks tumbled Thursday after US Federal Reserve boss Jerome Powell failed to soothe fears of a surge in inflation which many worry could force the US central bank to hike interest rates earlier than previously thought.
That prospect pushed the dollar to three-month highs versus the euro on Friday and undermined shares in Asia and in morning trading in Europe.
Powell on Thursday reiterated that the Fed would not tighten policy until its goals of full employment and consistent inflation had been met -- and that was likely to be some time away.
Traders were also left disappointed that Powell did not indicate he would act to ease the recent rise in bond yields.
The yield on benchmark 10-year US Treasuries spiked back above 1.5 percent to a one-year high after his comments.
Yields rise as bond prices fall -- and investors are rushing out of them as inflation would eat into their returns.
While the rollout of coronavirus vaccines, slowing infections, easing of lockdowns and an imminent new US stimulus are breathing life back into economies, investors are increasingly worried that ultra-loose monetary policies -- a key pillar of a year-long equity surge -- will be wound down if inflation spikes.
This has led to a sharp sell-off across world markets with the tech-rich Nasdaq on Thursday almost sinking into correction territory -- an accumulated 10 percent drop from recent highs -- after touching a record high last month.
US markets extended the week's losses, with the Nasdaq down more than two percent -- tech firms being more sensitive to higher interest rates -- while the Dow and S&P 500 dropped more than one percent.
"The market doesn't believe what the Fed is selling," said market analyst Stephen Innes at Axi.
"The Fed won't be able to put the rate hike genie back in the bottle anytime soon," he added.
Meanwhile, oil prices also struck fresh 14-month peaks above $68 per barrel following Thursday's surprise decision by OPEC and its major allies to maintain most output cuts until April.
"The surge in oil prices... will have done little to stem the mounting alarm over rising prices," noted AJ Bell investment director Russ Mould.
Key figures around 1430 GMT
- New York - Dow: UP 1.0 percent at 31,223.39 points
- London - FTSE 100: UP 0.8 percent at 6,702.24
- Frankfurt - DAX 30: FLAT at 14,052.00
- Paris - CAC 40: FLAT at 5,832.54
- EURO STOXX 50: UP 0.2 percent at 3,710.95
- Tokyo - Nikkei 225: DOWN 0.2 percent at 28,864.32 (close)
- Hong Kong - Hang Seng: DOWN 0.5 percent at 29,098.29 (close)
- Shanghai - Composite: FLAT at 3,501.99 (close)
- Euro/dollar: DOWN at $1.1936 from $1.1967 at 2200 GMT
- Pound/dollar: DOWN at $1.3861 from $1.3894
- Euro/pound: UP at 86.11 pence from 86.12 pence
- Dollar/yen: UP at 108.28 yen from 107.95 yen
- Brent North Sea crude: UP 3.1 percent at $68.80 per barrel
- West Texas Intermediate: UP 2.9 percent at $65.67 per barrel