Dow Drops as Jobs Report Ignites Hike Bets

The Dow Jones Industrial Average declined by roughly 325 points on Friday to around 53,400, following August's Nonfarm Payrolls report. The jobs number came in at 162K, exceeding the 56K forecast and marking the strongest monthly gain since March.

This development boosted the chances of a September interest rate hike from around even on Thursday to above 60%. Fed funds futures now price a 60.4% probability of a quarter-point increase at the upcoming decision on September 16, with the rest of the table pointing towards more tightening in the coming months.

The president praised the jobs number, calling on the Federal Reserve to lower interest rates, warning that if they don't, he will stop trading with countries running a deficit with the US, over 90 of which include China, Vietnam, and Indonesia. This threat weighs heavily on the index's constituents, including Apple (AAPL), Nike (NKE), Walmart (WMT), Boeing (BA), and Caterpillar (CAT).