US Stocks Plunge on Strong Jobs Data as Rate Hike Fears Rise

The US stock market fell across the board on August hiring data that exceeded expectations. The jobs report from the Labor Department showed nonfarm payrolls increased by 162,000 last month, the biggest gain in five months. This unexpected strength in hiring led to caution over a possible Federal Reserve rate hike at this month's FOMC meeting.

The New York Stock Exchange saw the Dow Jones Industrial Average close at 53,414.25, down 271.86 points or 0.51% from the prior session. The S&P 500 fell 29.11 points to 7,718.60 and the Nasdaq composite ended trading down 77.07 points or 0.29% at 26,506.99.

The strong hiring data also pushed up yields in the bond market. The 2-year Treasury yield rose to 4.379%, up 4.7 basis points from the prior session, while the 10-year yield increased by 2.2 basis points to 4.783%. The probability of a rate hike in September implied by federal funds futures was 58.4% according to CME FedWatch.

Pressure from US President Donald Trump on the Fed continued, with him stating that if rates do not lower, the United States could halt trade with countries running a trade surplus with it. He also expressed his desire for US rates to be at 1% or 0.5%.