U.S. stocks diverge after 162,000 August jobs gain revives Fed rate-hike bets

  • U.S. stocks traded mixed after August payroll growth revived Federal Reserve rate-hike expectations.
  • 162,000 jobs were added in August, versus 56,000 economists had projected.
  • Investors await August CPI and PPI data before the Federal Reserve’s September meeting.

U.S. stocks traded unevenly Friday after August nonfarm payrolls rose 162,000, sharply exceeding the 56,000 economists had forecast and accelerating from July’s revised 21,000 increase. The unemployment rate remained at 4.1%. The data pushed Treasury yields higher and revived expectations that the Federal Reserve could raise interest rates at its September meeting, reversing some of the easing in rate-hike bets after Fed Governor Christopher Waller said a day earlier that he could support holding rates steady if inflation was declining. The CME FedWatch tool had put the probability of a September hike near 50%, down from 63%. The Dow fell 0.34% to 53,505.46 at about 10 a.m. in New York, while the Nasdaq rose 0.17% to 26,628.45 and the S&P 500 was little changed. Lululemon plunged more than 17% after cutting its full-year profit and revenue forecasts for the second time, while Nvidia and Caterpillar each gained more than 2%. Adobe slipped after announcing that CEO Shantanu Narayen would transfer leadership to insider Anil Chakravarthy. Investors now await August Consumer Price Index and Producer Price Index data, the final major indicators before the Fed’s decision. Thin trading ahead of Monday’s Labor Day market closure and position squaring contributed to the choppy session.

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