US Stocks Face Volatile Tuesday as Labor Day Holiday Ends

The US stock market is closed on Monday for Labor Day, but investors are bracing themselves for what could be a volatile Tuesday.

A stronger-than-expected August jobs report has sent shockwaves through Wall Street, with the Dow Jones Industrial Average falling 0.51%, the S&P 500 declining 0.38%, and the Nasdaq Composite dropping 0.29% on Friday.

The report showed that US employers added 162,000 jobs in August, far exceeding the consensus estimate of 56,000. This has increased expectations that the Federal Reserve could raise interest rates at its September meeting, with the probability of a 25-basis-point rate hike rising to about 58.4%.

The upcoming inflation readings will be crucial in determining whether these expectations strengthen further or begin to reverse. A hotter-than-expected inflation reading could put pressure on stocks, while softer inflation could ease rate-hike concerns and provide support for equities.