Speaking at the Labour Party Conference, McDonnell said:
We will seek to preserve access to the Single Market for goods and services. Today, access to the Single Market requires freedom of movement of labour. But we will address the concerns that people have raised in the undercutting of wages and conditions, and the pressure on local public services.
McDonnell noted the UK's financial services sector had been "placed under threat" by the referendum outcome.
However, he added that, in return for Labour supporting access to markets for financial services, "our financial services must understand that 2008 must never happen again. We will not tolerate a return to the casino economy that contributed to that crash."
The shadow chancellor added his party would "fight for the best possible Brexit deal for the British people" and added that the party would be offering no support for the Transatlantic Trade and Investment Partnership (TTIP) or "any other trade deal that promotes deregulation and privatisation".
Other promises in McDonnell's speech included vowing to put an end to austerity measures, to set up a new tax enforcement unit at HM Revenue & Customs, to repel the Trade Union Act and to review the rate of minimum pay.
"It was also good to hear a pledge to seek access to the single market as part of the EU negotiations, and a recognition of its importance to several sectors including financial services," noted Carolyn Fairbairn, director general of the Confederation of British Industry. "However, the headlines created by a few irresponsible companies do not apply to the vast majority, which are focused on seizing investment opportunities to grow, creating new jobs, and supporting skills development."
Dr Adam Marshall, acting director general of the British Chambers of Commerce, urged the shadow chancellor to shy away from measures for businesses that could be seen as too interventionist.
"As the Labour Party develops its alternative economic proposals, it must remember that the state cannot control every aspect of economic or business life and stay competitive in a global economy," said Marshall. "We need to be making the UK the most attractive place to hire, invest and do business for the future, particularly given the historic transition we now face."
Mark Littlewood, director general at the Institute of Economic Affairs, added:
McDonnell's speech today was the epitome of fantasy economics. The very fact the Shadow Chancellor is proudly trumpeting Labour as a party of interventionism despite its catastrophic historical record should worry both business and voters.
Meanwhile, Simon Walker, director general of the Institute of Directors, said: "The shadow chancellor played a few good notes but the overall tone was concerning for business."