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S&P 500 flat, Nasdaq edge lower in choppy trading

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US jobs reports show mixed picture ahead of Friday's

payrolls

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Benchmark 10-year yields rise

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Oil prices shed 1%

(New throughout, updates prices, market activity and comments;

adds oil and gold settlement)

By Chibuike Oguh and Alun John

NEW YORK/LONDON, Jan 8 (Reuters) - A global bond selloff

continued on Wednesday, pressuring stock prices and boosting the

dollar as signs of continuing strength in the U.S. economy

dimmed expectations for aggressive near-term interest rate cuts.

The benchmark 10-year U.S. Treasury yield rose

as high as 4.73%, a peak since April 2024, building on Tuesday's

7 basis point rise. It was last up 0.4 basis points to 4.695%.

"Going into this first quarter that we're in right now,

aside from earnings, I think a big risk for equities is if bond

yields do get to 5%," said Mark Malek, chief investment officer

at SiebertNXT in New York. "Buyers are going to be a little bit

more reticent. So the people that were powering the market

higher, the bid is going to weaken."

The selloff in bonds on Wednesday accelerated after a CNN

report that U.S. President-elect Donald Trump is considering

declaring a national economic emergency to provide legal

justification for a series of universal tariffs on allies and

adversaries.

On Wall Street, the benchmark S&P 500 was flat, the Dow

rose, while the Nasdaq was trading lower in choppy trading with

utilities, energy and communication services driving losses.

Healthcare and industrials equities were among the biggest

gainers.

The Dow Jones Industrial Average rose 0.06% to

42,553.38, the S&P 500 rose 0.01% to 5,909.53 and the

Nasdaq Composite fell 0.12% to 19,466.47.

European shares dipped, with the pan-European STOXX 600

finishing down 0.2%, with most regional bourses also in

the red. MSCI's gauge of stocks across the globe

fell 0.22% to 845.05.

European government bond yields surged, with those on German

benchmark 10-year notes hitting their highest in

about six months. The British 10-year gilt yield

rose over 11 basis points to 4.82%, the highest since 2008.

Strong U.S. economic data have weighed on U.S. Treasuries in

recent weeks, with investors scaling back expectations for

Federal Reserve rate cuts.

Markets are only fully pricing in one 25-basis-point rate

cut in 2025, and see around a 60% chance of a second.

Investors will watch Friday's more comprehensive non-farm

payrolls data after data on Wednesday showed a lower than

expected increase in private payrolls and jobless claims.

"One thing I'm worried about is, this bonfire of yields

going higher tends to reinforce each other, particularly at

times like this," said Michael Purves, CEO and founder of

Tallbacken Capital Advisors. "I'm concerned about is if you can

buy a 10-year Treasury at 5% with zero risk and that's a higher

yield than on the S&P 500 that's going to beg a lot of asset

allocation questions."

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

rose 0.35% to 109.08, with the euro down 0.28% at $1.031.

Oil prices were pressured by a stronger dollar and large

builds in U.S. fuel inventories last week. Brent crude

settled down 89 cents, or 1.16%, to $76.23 a barrel. U.S. West

Texas Intermediate crude fell 93 cents, or 1.25%, to

$73.32.

Gold prices advanced. Spot gold rose 0.32% to

$2,657.89 an ounce. U.S. gold futures settled 0.3%

higher at $2,672.40.