Wall Street stocks finished modestly higher Friday as solid US jobs data boosted expectations for more Federal Reserve interest rate hikes, while oil prices retreated after US allies agreed to tap their emergency stockpiles.

The government jobs report for March showed US employers adding 431,000 positions and the unemployment rate falling to 3.6 percent, a hair above where it was before the pandemic.

The data showed progress in the US economic recovery, but also raised expectations of an aggressive Federal Reserve interest rate hike to tame runaway inflation.

"Given the strength of the labor market and inflation well above target, the probability that the Fed raises rates by 50 (basis points) at its next meeting in May -- which is our baseline -- is rising," Daniel Vernazza of UniCredit Bank said in a note.

However, the Institute for Supply Management reported the US manufacturing sector's expansion slowed last month amid a spike in energy prices following Russia's invasion of Ukraine.

After a choppy session, all three major US indices finished modestly higher with the S&P 500 up 0.3 percent, lifting the index narrowly into positive territory for the week.

European equities also climbed, despite data showing eurozone inflation surged by a record 7.5 percent last month.

Analysts said soaring inflation will pressure the European Central Bank, which has thus far been reluctant to follow the Federal Reserve's lead and lift interest rates.

"With euro-zone inflation rising even further above the ECB's forecast, and likely to remain very high for the rest of the year, we think it won't be long before the Bank starts raising interest rates," said Jack Allen-Reynolds at Capital Economics.

Oil prices, meanwhile, retreated, with the US benchmark WTI contract dipping under $100 a barrel.

In a bid to ease oil prices, the 31-nation International Energy Agency agreed to tap emergency oil reserves again at an emergency ministerial meeting following a pledge to release over 60 million barrels.

The IEA, whose members include the United States, European countries, Japan and other nations allied to Washington, said it would make the new amount public early next week.

The move came a day after Biden announced a record release of oil onto the market -- one million barrels of US government oil every day for six months in a bid to ease prices.

Biden described the move as a "wartime" measure that will defuse Russia's leverage as an energy power.

Washington has pressed the OPEC+ group of oil producing countries, led by Saudi Arabia and Russia, to boost its output but the group on Thursday agreed on another modest increase instead.

Markets have been plunged into turmoil by central bank moves to tighten policy post-pandemic, and then by the invasion of Ukraine
Markets have been plunged into turmoil by central bank moves to tighten policy post-pandemic, and then by the invasion of Ukraine AFP / Kazuhiro NOGI

The war has driven oil prices to near record heights over concerns about supplies as Russia is the world's second biggest exporter of crude after Saudi Arabia.

New York - Dow: UP 0.4 percent at 34,818.27 (close)

New York - S&P 500: UP 0.3 percent at 4,545.86 (close)

New York - Nasdaq: UP 0.3 percent at 14,261.50 (close)

London - FTSE 100: UP 0.3 percent at 7,537.90 (close)

Frankfurt - DAX: UP 0.2 percent at 14,446.48 (close)

Paris - CAC 40: UP 0.4 percent at 6,684.31 (close)

EURO STOXX 50: UP 0.4 percent at 3,918.68 (close)

Tokyo - Nikkei 225: DOWN 0.6 percent at 27,665.98 (close)

Hong Kong - Hang Seng Index: UP 0.2 percent at 22,039.55 (close)

Shanghai - Composite: UP 0.9 percent at 3,282.72 (close)

Brent North Sea crude: DOWN 0.3 percent at $104.39 per barrel

West Texas Intermediate: DOWN 1.0 percent at $99.27 per barrel

Euro/dollar: DOWN at $1.1049 from $1.1067 late Thursday