NEW YORK — U.S. stocks fell across the board after a surprisingly strong jobs report revived expectations that the Federal Reserve will raise interest rates.
The Dow Jones Industrial Average closed at 53,414.25 on the 4th, down 271.86 points, or 0.51%. The S&P 500 fell 29.11 points, or 0.38%, to 7,718.60, while the Nasdaq Composite lost 77.07 points, or 0.29%, to end at 26,506.99.
Among the largest companies by market value, Apple dropped 2.51%, Microsoft fell 2.04%, Amazon slipped 0.15%, Google parent Alphabet declined 1.11%, SpaceX lost 1.20% and Tesla tumbled 5.92%. Nvidia rose 0.84%, TSMC gained 2.85%, Broadcom added 0.21% and Meta advanced 1.00%, holding up in a down market. Memory chip stocks rebounded sharply on favorable calls from Wall Street, with SK hynix up 8.14%, Micron up 6.10% and SanDisk up 11.90%. The Philadelphia Semiconductor Index climbed 3.38%. Nomura Securities said the same day that expanding artificial intelligence investment continues to drive a supply shortage and rising demand for memory chips, describing the sector as severely undervalued.
The market took its cue from the August nonfarm payrolls report released just before the opening bell. Nonfarm employment rose by 162,000 from July, the Labor Department said, more than 100,000 above the market forecast of 56,000. The unemployment rate held at 4.1%, unchanged from July.
Payroll figures for the previous two months were also revised higher. July employment was revised up by 44,000, to a gain of 21,000 from an initially reported decline of 23,000. June's increase was raised by 11,000, to 31,000 from 20,000. The combined upward revisions for June and July totaled 55,000. President Donald Trump wrote on his social media platform Truth Social that great jobs numbers had just been released, and renewed his call for interest rates to be cut to the lowest levels in the world, arguing that U.S. credit has improved.
With employment improving more than expected, market-implied odds of a rate increase rebounded after falling on dovish remarks from some Fed officials, including Governor Christopher Waller. According to CME Group's FedWatch tool, the federal funds futures market raised the probability of a rate hike at the Federal Open Market Committee meeting on the 15th and 16th to 58.4% from 49.4% a day earlier. The odds of no change fell to 41.6% from 50.6%. The two-year Treasury yield, which is sensitive to monetary policy, jumped 0.091 percentage points immediately after the report and touched 4.425% during the session. The 10-year yield, the global bond market benchmark, rose to 4.812%, while the 30-year yield, a reference for mortgage rates, climbed to 5.275%.
Oil prices rose again as uncertainty in the Middle East persisted. Concerns over supply disruptions spread from the Strait of Hormuz to the Bab el-Mandeb Strait, a shipping chokepoint at the entrance to the Red Sea, pushing prices higher. West Texas Intermediate crude for October delivery settled at $91.48 a barrel on the New York Mercantile Exchange, up 0.20%. WTI has now risen for five consecutive sessions since the 31st of last month. Brent crude for November delivery on London's ICE Futures Exchange closed 0.80% higher at $96.28 a barrel.
At least 129 people were killed in a single day as Yemen's Iran-aligned Houthi rebels and government forces clashed fiercely starting on the 3rd, according to AFP and other news agencies. It was the deadliest single engagement in Yemen's civil war in recent years. The fighting was triggered when Houthi forces advanced near the Bab el-Mandeb Strait, a critical bottleneck through which global crude oil and natural gas must pass to reach the Suez Canal.
