Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., Aug. 24, 2026. <\/p>\n
Brendan McDermid | Reuters<\/p>\n
The Dow Jones Industrial Average<\/a> fell on Friday as August’s hotter-than-expected payrolls reading<\/a> increased expectations that the Federal Reserve could raise interest rates at its next meeting.<\/p>\n The 30-stock Dow was down 382 points, or 0.7%. The S&P 500<\/a> slid 0.5%, while the Nasdaq Composite<\/a> shed 0.4%.<\/p>\n 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.<\/p>\n Treasury yields rose following the report, with the 2-year<\/a> yield hitting its highest level since January 2025<\/a>. 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<\/a>. Odds were at 49.4% a day ago.<\/p>\n “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.<\/p>\n 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.”<\/p>\n