Dow Drops as Strong Jobs Report Boosts Rate Hike Bets
The US stock market ended lower on Friday after stronger-than-expected August employment data led to increased expectations of a Federal Reserve rate hike at its September meeting.
The Dow Jones Industrial Average fell by 0.5% or 279.20 points, while the S&P 500 declined by 0.38% and the Nasdaq Composite lost 0.3%. The selling came ahead of the three-day Labor Day weekend as investors reassessed the outlook for monetary policy following the latest labor market data.
The August jobs report showed that nonfarm payrolls increased by 162,000, nearly three times the consensus estimate of 56,000 cited by Reuters. The unemployment rate remained at 4.1%, while employment figures for June and July were revised higher by a combined 55,000 jobs.
The stronger labor market data has complicated the Fed's policy outlook, with resilient employment supporting economic activity but also making it more difficult to ease inflationary pressures, particularly as energy prices remain elevated amid the US-Iran conflict.