Yields, Dollar Rise and Stocks Ease After Solid US Jobs Report

US Treasury Yields, Dollar Jump; Stocks Slip After Strong Jobs Report

Market Reactions to Strong US Jobs Report

By Caroline Valetkevitch

Overview of Market Movements

NEW YORK, Sept 4 (Reuters) – Treasury yields and the dollar rose, while stocks fell on Friday after stronger-than-expected U.S. job growth data boosted bets on a September interest rate hike by the Federal Reserve.

All three of the major U.S. stock indexes ended lower in a broad selloff ahead of a three-day holiday weekend. A global stock index declined as well.

US Jobs Data and Federal Reserve Outlook

Nonfarm payrolls rose by 162,000 jobs last month after an upwardly revised rise of 21,000 in July. Economists polled by Reuters had forecast an increase of 56,000 after a previously reported drop of 23,000 in July. The unemployment rate held steady.

Treasury Yields and Monetary Policy Implications

Two-year yields, which are particularly sensitive to changes in monetary policy, led the rise in Treasuries and were last up 4 basis points at 4.37%. The yield briefly peaked at 4.4246%, its highest since January 2025. The yield on 10-year Treasury notes was up nearly 2 basis points around 4.78%, after reaching a peak of 4.812% following the data.

“In the Fed’s eyes, the labor market is holding up, which means inflation remains the bigger problem,” said Bret Kenwell, U.S. investment analyst at eToro in New York.

He said investors will pay close attention to next week’s consumer prices report ahead of the Fed’s mid-September decision.

Just after the jobs report, short-term interest-rate futures implied about a 65% chance for a hike at the Fed’s September meeting, up from about 55% before the report. By New York afternoon trade, that was back down to 57%.

Producer price inflation data is due on Thursday, and the consumer price inflation report is scheduled for Friday next week. Economists expect the core CPI to ease to 2.4% on the year, from 2.5% in July. 

Oil Prices and Currency Markets

OIL PRICES, DOLLAR UP

Oil Price Movements Amid Global Tensions

Renewed attacks in the U.S.-Iran war this week have sparked a jump in oil prices, adding to existing worries about higher costs.

Oil prices rose and ended higher for the week. Brent crude futures settled at $92.68 a barrel, up 76 cents, or 0.8%. West Texas Intermediate crude futures finished at $91.48 a barrel, up 18 cents, or 0.20%.

For the week, Brent crude rose 7.6% while U.S. crude gained nearly 10%, as supply routes in the Middle East remain impaired due to the war.

Stock Market and Currency Index Performance

Adding to the day’s weakness on Wall Street, Adobe dropped 6.7% following its announcement that longtime CEO Shantanu Narayen will be succeeded by insider Anil Chakravarthy.

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

MSCI’s gauge of stocks across the globe fell 1.09 points, or 0.09%, to 1,153.65. The pan-European STOXX 600 index rose 0.12%.

The dollar jumped after the jobs data but gave up some of its early gains. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.21% to 99.17, with the euro down 0.12% at $1.1611.  

Against the Japanese yen, the dollar strengthened 0.26% to 156.19. The yen has surged this week, however, as traders boost bets on more or faster Bank of Japan interest rate hikes, and it is testing the 155.21 level, which was its high after last month’s U.S.-Japan intervention. If it breaks through that, it will reach its strongest level since May 6.

Gold Prices

Spot gold fell 1.2% to $4,419.09 per ounce.

(Reporting by Caroline Valetkevitch in New York, additional reporting by Marc Jones in London and Suzanne McGee; Editing by Alex Richardson and Sharon Singleton)