US stocks today: S&P 500, Dow stocks slip as stronger jobs report lifts rate-hike bets

US stocks slipped on Friday after a stronger-than-expected August jobs report revived expectations that the Federal Reserve could raise interest rates later this month, putting renewed pressure on equities heading into the Labor Day weekend, Reuters reported.

The shift in monetary-policy expectations weighed on the major indexes, although the moves remained relatively modest. At 9:44 a.m. ET, the Dow Jones Industrial Average was down 176.48 points, or 0.33%, at 53,509.63. The S&P 500 fell 12.48 points, or 0.16%, to 7,735.23, while the Nasdaq Composite slipped 9.14 points, or 0.04%, to 26,573.86.

The US economy added 162,000 jobs in August, far above the 56,000 increase economists polled by Reuters had expected, according to a Labor Department report. The unemployment rate held at 4.1%, in line with expectations. The stronger reading prompted traders to increase their bets on a rate hike at the Fed's September 15-16 meeting, with short-term interest-rate futures implying a 65% chance of an increase, up from 55% before the report, according to Reuters.


The jobs data could give the central bank more room to keep its attention on inflation, particularly as Fed Chair Kevin Warsh has indicated that controlling price pressures is his top priority.

"This is obviously a very volatile report, but it does mean that at this point the Fed's focus is going to be on inflation," said Josh Stevens, chief investment officer at CresAlta Investment Management.

"The argument about the labor market remaining weak has some validity, but if employment shows strength in next few months, we'd see a pickup in wages, and that would get the Fed's attention."

The next major test for markets will come from inflation data due next week. The Labor Department is scheduled to release consumer price index and producer price index data, which could prove pivotal to the Fed's decision on interest rates.

The market reaction was uneven across sectors. Utilities were the only major S&P 500 sector trading higher as investors moved towards defensive stocks following the jobs report.

Among individual stocks, Lululemon Athletica fell 16.9% after cutting its full-year profit and revenue forecasts.

Adobe dropped 7.3% after it said longtime CEO Shantanu Narayen would hand over the reins to insider Anil Chakravarthy.

US credit-reporting agencies also came under pressure after US Director of Federal Housing Bill Pulte said on Thursday that he had directed Fannie Mae and Freddie Mac, which were created by the US Congress to support the housing market, to approve all lenders to use the VantageScore credit-scoring system.

Fair Isaac fell 20%, while TransUnion was down 9.4% and Equifax slid 8%.

As investors head into the Labor Day weekend, attention is also turning to September's historically weak seasonal pattern for stocks. September has typically been the weakest month for equities, although most of the weakness comes in the second half of the month, when returns have averaged worse than 1%, according to Melissa Brown, global head of investment decision research at SimCorp.

Market breadth remained negative, with declining issues outnumbering advancers by 1.76-to-1 on the NYSE and 1.35-to-1 on the Nasdaq.

The S&P 500 recorded one new 52-week high and four new lows, while the Nasdaq Composite posted 15 new highs and 38 new lows.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)