Strong Jobs Report Triggers Interest Rate Hike Fears

U.S. stocks fell on Friday after a surprisingly strong jobs report indicated that employers added 162,000 jobs in August, exceeding the 65,000 forecasted by analysts.

The unexpected increase in hiring has given the Federal Reserve leeway to raise its benchmark short-term interest rate to combat inflation when policymakers meet later this month.

'Today's jobs report does lean toward the Fed increasing rates,' said Terry Sandven, chief equity strategist at U.S. Bank Asset Management Group, but noted that a rate hike is 'not a foregone conclusion.'

The S&P 500 fell 0.4%, while the Dow Jones Industrial Average dropped 291 points, or 0.5%, as of 3:28 p.m. Eastern time.