U.S. stocks ended a volatile week in the red following a strong jobs report

Major U.S. stock indices reacted to the release of a strong August jobs report with a decline. The Dow Jones Industrial Average, a blue-chip index, lost 0.51% at the close of trading on Friday, September 4. The broad-market S&P 500 index fell 0.38%, while the tech-heavy Nasdaq Composite dropped 0.29%. Meanwhile, the Nasdaq-100 index, which consists of tech giants, and the Russell 2000, which includes small- and mid-cap companies, gained 0.21% and 0.25%, respectively, over the course of the day.

Over the week, the DJIA fell 0.27%, the S&P 500 rose slightly by 0.09%, and the Nasdaq gained 0.4%.

Nonfarm payrolls rose by 162,000 last month, significantly exceeding the forecast of economists surveyed by Dow Jones, who had expected an increase of 53,000. The unemployment rate, as expected, remained at 4.1%. In addition, the figures for June and July were revised upward.

Following the release of the yield report, U.S. Treasury bond yields rose: the yield on two-year Treasuries reached its highest level since January 2025, according to CNBC. Spot gold prices fell 1% to $4,430 per troy ounce. September-expiring futures lost 1.4% and ended the week down 1.1%, MarketWatch reported, citing data from Dow Jones Market Data. Overall, the two-week decline exceeded 4%, marking the steepest drop since June, MarketWatch noted. Rising interest rates could make gold less attractive to investors, as this asset does not generate interest income. After rallying on Thursday, Bitcoin reversed course and fell below $80,000.

Expectations that the Fed might raise rates in just a couple of weeks have also increased: according to the CME FedWatch tool, traders in federal funds rate futures now put the probability of a rate hike at 58%. The day before, expectations stood at 49.4%.

Following the release of the employment report, U.S. President Donald Trump demanded that the Federal Reserve sharply lower interest rates. Otherwise, he will halt trade with countries with which the U.S. has a trade deficit, he threatened in a post on Truth Social.

“The very strong August jobs report reminds us that this labor market indicator has become extremely volatile, and at the same time, it slightly increases the likelihood of a rate hike in September,” Bradford Smith, a portfolio manager at Janus Henderson Investors, told CNBC. Now, he said, the debate over the Fed’s next steps “will depend directly on incoming inflation data.”

“Following Chairman Warsh’s hawkish remarks in Jackson Hole last week, it is clear that the Fed is leaning toward taking action unless new data show further progress in bringing inflation under control,” Smith concluded.

“Although today’s labor market report has sharply raised expectations for a rate hike in September, such an outcome cannot yet be considered a foregone conclusion,” Bloomberg quotes Charlie Ripley, senior investment strategist at Allianz Investment Management, as saying. He added that it would be more difficult for the Fed to raise rates later this month if upcoming data show that inflation has already peaked.

This article was AI-translated and verified by a human editor