Red-hot US jobs data sent the dollar and bond yields higher on Friday as chances of an early interest rate cut faded.
Wall Street nevertheless mostly moved higher, buoyed by tech stocks and the silver lining of the jobs data pointing to the US economy avoiding a recession.
The US labour market smashed expectations last month in a surprise hiring pick-up, adding 353,000 jobs in January and the Department of Labor revising December's figure sharply higher.
The unemployment rate held steady at 3.7 percent for a third straight month.
"If March wasn’t off the table as far as rate cuts were concerned before today’s payroll numbers, it’s not even in the same room now," said CMC Markets analyst Michael Hewson.
US Federal Reserve boss Jerome Powell earlier this week dampened expectations of an early cut to interest rates, but the strong job creation figures and wage gains are likely to give policymakers additional pause before proceeding.
"The data exemplifies the concerns about inflation that we heard from the Fed," said Kathleen Brooks, research director XTB.
"This data is too strong for the Fed, and it could lead to a further recalibration of market-based interest rate expectations," she added.
The prospect of higher interest rates for longer sent US bond yields and dollar climbing, with the greenback rising by more than one percent against the yen.
The strong jobs data was positive in another sense.
"That said this wasn’t bad news for US markets given that the prospect of a recession looks even further away than ever, but also means that on an economic basis a resilient US economy should mean company earnings hold up," added CMC Markets's Hewson.
The blue-chip Dow spent most of the morning modestly lower but gradually poked into positive territory. Meanwhile, the broader S&P 500 added 0.8 percent.
Meta and Amazon shine
The Nasdaq index climbed 1.3 percent, boosted by Meta and Amazon blowing through expectations in their latest quarterly results.
Shares in Meta jumped more than 20 percent after the tech titan behind Facebook and Instagram reported a profit of $14 billion in the final three months of last year, beating analyst forecasts as revenue climbed to $40.1 billion in the quarter.
Amazon also impressed investors with sales up to a more-than-expected $170 billion in the last quarter of 2023, after a record-beating holiday season. Its shares rose more than 7 percent.
Apple, maker of iPhone, meanwhile reported sales rose slightly in the final three months of 2023 but worries surrounding China cast a pall on the news. Its shares fell 3.7 percent before cutting losses.
European equities ended mixed after spending most of the day higher rose, with Frankfurt's DAX setting a new intraday record of 17,004.55 points.
On the downside in Asia, Shanghai and Hong Kong fell, with traders still worrying about the state of China's economy and the lack of strong measures to provide stimulus.
The property sector is of particular concern, especially after the liquidation by a Hong Kong court this week of troubled developer Evergrande, which is wallowing in more than $300 billion of debt.
Analysts also pointed to traders selling before the Lunar New Year break.
Oil prices fell amid concerns about demand.
"Talk of a possible ceasefire between Hamas and Israel is also weighing on prices," noted Hewson at CMC Markets.
Key figures around 1630 GMT
New York - Dow: FLAT at 38,531.83 points
New York - S&P 500: UP 0.8 percent at 4,945.80
New York - Nasdaq Composite: UP 1.3 percent 15,567.03
London - FTSE 100: DOWN less than 0.1 percent at 7,615.54 (close)
Paris - CAC 40: UP less than 0.1 percent at 7,592.26 (close)
Frankfurt - DAX: UP 0.4 percent at 16,918.21 (close)
EURO STOXX 50: UP 0.3 percent at 4,654.55 (close)
Tokyo - Nikkei 225: UP 0.4 percent at 36,158.02 (close)
Hong Kong - Hang Seng Index: DOWN 0.2 percent at 15,533.56 (close)
Shanghai - Composite: DOWN 1.5 percent at 2,730.15 (close)
Euro/dollar: DOWN at $1.0797 from $1.0874 on Thursday
Dollar/yen: UP at 148.34 yen from 146.42 yen
Pound/dollar: DOWN at $1.2640 from $1.2746
Euro/pound: UP at 85.39 pence from 85.29 pence
West Texas Intermediate: DOWN 1. percent at $72. per barrel
Brent North Sea Crude: DOWN 1. percent at $77. per barrel