Source : INDIA TODAY NEWS
US stocks fell on Friday after a stronger-than-expected US jobs report raised the possibility that the Federal Reserve could increase interest rates later this month to tackle inflation. Treasury bond yields mostly rose, while investors also kept watch on elevated oil prices and their impact on inflation.
The S&P 500 fell 0.3 per cent, the Dow Jones Industrial Average was down 245 points, or 0.5 per cent, by 12:48 pm Eastern time, and the Nasdaq composite slipped 0.2 per cent. Gains in technology stocks helped limit the broader losses, even as markets in Europe and Asia were mixed.
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The Labour Department reported that US employers added 162,000 jobs in August, far above the 65,000 expected by forecasters in a FactSet poll. Revisions also added 55,000 jobs to June and July payrolls, while the unemployment rate remained unchanged at 4.1 per cent.
The stronger jobs data could give the Fed more room to raise its benchmark short-term interest rate when policymakers meet later this month. Terry Sandven, chief equity strategist at US Bank Asset Management Group, said, “Today’s jobs report does lean toward the Fed increasing rates,” though he added that a rate hike is “not a foregone conclusion.”
Jeffrey Roach, chief economist for LPL Financial, said, “Given the strength of the payroll report, a rate hike on Sept. 16 appears increasingly likely.” He added, “Ironically, a rate hike may generate less market volatility than another meeting in which policymakers choose to stand pat.” According to CME FedWatch, expectations for a rate hike in September rose to 60.4 per cent on Friday after the jobs report, up from 49.4 per cent on Thursday and 57 per cent a week ago.
Investors are now looking to the August inflation figures due on Sept. 11, ahead of the Fed’s next policy meeting, which ends on Sept. 16. The consumer price index is expected to show inflation rose at a 3.4 per cent rate last month, unchanged from July. Inflation has remained above 3 per cent for most of the year, while the Fed’s stated target is 2 per cent.
Jim Baird, chief investment officer with Plante Moran Financial Advisors, said, “With the August CPI report now on deck, the question is whether the combined impact of stronger-than-expected hiring and a stiff inflation tailwind will push policymakers to the tipping point of raising rates later this month.” Fed Chair Kevin Warsh said last week at the central bank’s annual economic symposium in Jackson Hole, Wyoming, that inflation had not shown enough improvement and that the Fed might have “more work to do”, signalling that he is weighing a rate increase. On Thursday, Federal Reserve governor Christopher Waller said that if fresh data next week shows inflation is cooling, he “would be inclined” to leave rates unchanged, but would consider a hike if inflation comes in hotter.
In the bond market, the yield on the 10-year Treasury, which influences mortgage rates, edged down to 4.76 per cent from 4.77 per cent late Thursday. It has risen steadily through the year and was as low as 4.20 per cent at the beginning of 2026. The 2-year Treasury yield, which closely tracks expectations for Fed moves, rose to 4.36 per cent from 4.34 per cent and was as low as 3.50 per cent at the beginning of 2026.
Among stocks, Nvidia rose 1.4 per cent, Advanced Micro Devices gained 4.2 per cent, SanDisk jumped 10.4 per cent, and Micron Technology added 4.6 per cent. Lululemon Athletica fell 17.4 per cent after reporting quarterly revenue below analysts’ estimates and lowering its full-year outlook again.
Oil prices eased initially on Friday but remained elevated after sharp gains earlier in the week as the six-month-long US war with Iran intensified. Iran fired at Kuwait on Thursday in retaliation for US bombardments earlier in the week, and the Strait of Hormuz remains effectively closed. Brent crude fell 0.2 per cent to USD 95.37 a barrel, while benchmark US crude was down 0.6 per cent at USD 90.72 a barrel. For the week, they are up 8.2 per cent and 8.8 per cent, respectively.
US gasoline prices this weekend will be higher than they have ever been at this time of year, according to AAA. Diesel touched an all-time high for any time of the year on Friday at an average of USD 5.85 a gallon. As diesel is widely used in freight and delivery networks, higher diesel prices can push up transport costs for a range of everyday goods and add to pressure on consumer prices.
Overall, the stronger jobs report, firm inflation expectations and high energy prices kept pressure on Wall Street on Friday, while investors assessed whether the Fed will raise rates later this month. US stock markets will remain closed on Monday for the Labour Day holiday.
With PTI Inputs
– Ends
SOURCE :- TIMES OF INDIA
