Strong Jobs Data Push September Fed Rate-Hike Odds to 58%; Three Major US Indexes Fall [New York Stocks Briefing]

Major U.S. stock indexes closed lower in New York after strong employment data lifted the odds of another Federal Reserve interest-rate increase.

On September 4, the Dow Jones Industrial Average fell 271.86 points, or 0.51%, to 53,414.25. The S&P 500 dropped 29.11 points, or 0.38%, to 7,718.60, while the Nasdaq Composite lost 77.07 points, or 0.29%, to 26,506.99.

The jobs data added to concerns about higher rates. The U.S. Labor Department said nonfarm payrolls increased by 162,000 in August from the previous month, the largest gain in five months. That was nearly three times the consensus forecast.

CME FedWatch showed the federal funds futures market pricing in a 58.4% chance of a rate hike in September, up 9.0 percentage points from the previous day.

Treasury yields also rose. The yield on the policy-sensitive two-year U.S. Treasury note stood at 4.379% as of 3 p.m. Eastern Time, up 4.7 basis points from the prior session. One basis point equals 0.01 percentage point.

The benchmark 10-year U.S. Treasury yield rose 2.2 basis points to 4.783%.

The dollar strengthened as well. The dollar index, which measures the greenback against six major currencies, rose 0.21% to 99.17.

Cryptocurrencies came under pressure. Bitcoin, which had recently traded above $80,000, briefly fell into the $78,000 range. The broader crypto market also weakened.

President Donald Trump intensified pressure on the Fed. In a Truth Social post, he said the U.S. would stop trading with countries running deficits for the United States unless interest rates were lowered. Speaking to reporters, Trump said U.S. interest rates should be 1% or 0.5%.

Oil prices rose. Clashes between Yemeni government forces and rebels in the Bab el-Mandeb Strait, which connects the Red Sea and the Gulf of Aden, heightened concerns over supply disruptions.

Brent crude for November delivery rose 0.80% to settle at $96.28 a barrel. West Texas Intermediate crude for October delivery gained 0.20% to close at $91.48 a barrel.

The market's next focus is the August consumer price index. With the jobs report reviving the possibility of another Fed rate increase, inflation data will be a key variable in determining the path of monetary policy.

Han Kyung-woo, Hankyung.com reporter, case@hankyung.com