Stocks Plummet After Surprisingly Strong Jobs Report Raises Rate Hike Chances

The US stock market declined on Friday after the release of a surprisingly strong jobs report. The S&P 500 fell 0.4%, while the Dow Jones Industrial Average dropped 0.5%. The Nasdaq composite gave back 0.3%.

The Labor Department reported that employers added 162,000 jobs in August, exceeding the forecasted 65,000. This unexpected increase in hiring may give the Federal Reserve more leeway to raise interest rates at their next policy meeting on September 16.

Fed Chair Kevin Warsh said last week that inflation had not shown sufficient improvement and that the central bank might have 'more work to do', a sign he is weighing a rate increase. Meanwhile, Federal Reserve governor Christopher Waller stated that if new data shows cooling inflation, he would be inclined to keep interest rates unchanged.