Stocks Tumble as Jobs Report Puts Rate Hike Back in Focus

U.S. stock markets fell on Friday following a stronger-than-expected jobs report that could give the Federal Reserve leeway to raise interest rates and fight inflation.

The Labor Department reported that employers added 162,000 jobs last month, exceeding the 65,000 forecasters had expected. The unemployment rate held steady at 4.1%.

With hiring in August far surpassing expectations, the Fed may be more likely to raise interest rates at its next meeting on September 16. The possibility of a rate hike increased to 60.4%, up from 49.4% on Thursday and 57% last week, according to CME FedWatch.

However, not all analysts agree that a rate hike is imminent. Terry Sandven, chief equity strategist at U.S. Bank Asset Management Group, said the jobs report 'leans toward the Fed increasing rates,' but noted it's 'not a foregone conclusion.'