Surprise Jobs Report Triggers Rate Hike Fears, Stocks Wobble

U.S. stocks took a hit on Friday after a stronger-than-expected jobs report fueled expectations of an interest rate hike by the Federal Reserve. The Labor Department reported that employers added 162,000 jobs last month, exceeding the forecasted 65,000.

The surprise increase in hiring could give the Fed leeway to raise its benchmark short-term interest rate to combat inflation when policymakers meet later this month. Market expectations for a rate hike jumped to 60.2% following the release of the jobs report, up from 49.4% on Thursday and 57% a week ago.

The S&P 500 fell 0.5%, while the Dow Jones Industrial Average dropped 378 points or 0.7%. The Nasdaq composite lost 0.4%. Despite gains in technology stocks, which helped limit declines in other sectors, some companies struggled with disappointing quarterly results and lower full-year outlooks.