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Stocks fall after a surprisingly strong jobs report raises prospects of an interest rate hike
apnews.com • • business
Key Points:
- U.S. stocks declined on Friday after the Labor Department reported an unexpected addition of 162,000 jobs in August, raising expectations that the Federal Reserve may increase interest rates later this month to combat persistent inflation.
- The S&P 500 fell 0.4%, the Dow Jones dropped 0.5%, and the Nasdaq lost 0.3%, while Treasury yields rose, reflecting market anticipation of a Fed rate hike, with the probability of a September increase rising to over 60%.
- Inflation remains above 3%, partly driven by rising oil prices amid the ongoing U.S.-Iran conflict, with Brent crude and U.S. crude prices up significantly for the week; diesel prices hit a record high, impacting transportation and consumer costs.
- Federal Reserve officials have expressed differing views ahead of the September 16 policy meeting, with some signaling a likely rate hike if inflation data does not improve, while others remain open to holding rates steady depending on upcoming inflation reports.
- Technology stocks showed gains, helping limit market declines, but some companies like Lululemon Athletica experienced sharp losses after disappointing earnings, and U.S. markets will be closed Monday for Labor Day.
