Dow falls after much stronger-than-expected jobs report: Live updates

The Dow Jones Industrial Average fell on Friday as August’s hotter-than-expected payrolls reading increased expectations that the Federal Reserve could raise interest rates at its next meeting.

The 30-stock Dow was down 226 points, or 0.4%. The S&P 500 slid 0.2%, while the Nasdaq Composite traded up 0.1%.

Nonfarm payrolls grew 162,000 last month, much more than the 53,000 that economists polled by Dow Jones expected. The unemployment rate held steady at 4.1%, as expected. On top of last month’s gain, figures for both June and July saw upward revisions.

Treasury yields rose following the report, with the 2-year yield hitting its highest level since January 2025. Expectations that the Fed could hike rates in a couple weeks increased, as fed funds futures traders are now pricing in a 58% chance of a hike, per the CME FedWatch tool. Odds were at 49.4% a day ago.

“A monster jobs report for August reminds us that this labor statistic has become highly volatile while nudging up the probability of a September hike slightly,” said Bradford Smith, portfolio manager at Janus Henderson Investors.

Now, the debate surrounding the Fed “will sit handily on the incoming inflation data,” he added. “After a hawkish appearance from Chairman Warsh at Jackson Hole last week, there is a clear bias at the Fed to take action if the incoming data does not show further progress on disinflation.”

The three major averages rose on Thursday, catching a tailwind as Treasury yields pulled back after Federal Reserve Governor Christopher Waller said he would be “inclined to support” keeping rates at their current target range of 3.5% to 3.75% at the central bank’s Sept. 15-16 meeting.

However, the Dow is still heading for a drop of 0.2% this week. The S&P 500 is on track for a 0.3% advance in the period, while the Nasdaq is on pace for a 0.7% gain.

President Donald Trump on Friday praised the result of the August jobs reading and threatened to cut off trade with certain countries if the Federal Reserve doesn’t slash interest rates in the report’s wake.

“Great jobs number just announced, breaking all estimates (except mine!) by double and triple – And you haven’t seen anything yet!” he wrote in a Truth Social post on Friday. “Lower the interest rates because the U.S.A. is a much stronger credit than it was just a short time ago!”

“We should have the LOWEST RATE of any country in the World, like ‘the old days,’” he also wrote, before adding, “LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT.”

BY: Sean Conlon