U.S. stocks declined on Friday, with the Dow Jones Industrial Average falling 215.11 points, or 0.40%, to 53,471.00 points, after the U.S. reported that nonfarm payrolls increased by 162,000 jobs in August, significantly higher than the 55,000 jobs analysts had expected. This prompted investors to increase their bets that the Federal Reserve may raise interest rates by 0.25% at its September meeting. The CME Group's FedWatch Tool indicated that the probability of such a move rose to 60.2% from 49.4%. Meanwhile, the yield on the 2-year U.S. Treasury note surged to 4.425%, its highest level since January 2025. The unemployment rate held steady at 4.1%, and average hourly earnings rose 3.1% year-over-year, above the expected 3.0%.
Strong jobs data raises odds of Fed rate hike, pushing policy rate expectations up.
2-year yield surged to 4.425% on increased Fed hike probability, reflecting higher yield.
Rate hike expectations and strong data push 10-year yields higher, lowering bond prices.
