Strong Jobs Report Sparks Interest Rate Hike Fears

U.S. stocks fell on Friday after a stronger-than-expected jobs report raised prospects of an interest rate hike by the Federal Reserve later this month.

The S&P 500 index fell 0.4%, while the Dow Jones Industrial Average dropped 0.5% and the Nasdaq composite lost 0.3%.

According to a poll by FactSet, forecasters had expected a 65,000 job gain in August, but the Labor Department reported a surprise increase of 162,000 jobs last month.

The stronger-than-expected hiring could give the central bank's policymakers leeway to raise the Fed's benchmark short-term interest rate to fight inflation at their next policy meeting on September 16.