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WAM reported that Wall Street ended the session with modest losses after the US Labor Department released stronger than anticipated employment data for August. The Dow Jones Industrial Average declined 272 points while the S&P 500 and Nasdaq Composite each gave up less than half a percent. The retreat came as investors repriced expectations for near term monetary policy in response to signs of labor market strength.
The Bureau of Labor Statistics said nonfarm payrolls rose by 162,000 in August after an upward revision to the prior month’s gain. Economists surveyed by Reuters had projected an increase of only 56,000. The unemployment rate held steady at 4.1 percent according to the same government release.
Short term interest rate futures now price in roughly 59 percent odds of a Federal Reserve rate increase at the September 15 16 policy meeting up from 55 percent before the report a Reuters assessment found. The 2 year Treasury yield rose several basis points on the news reaching 4.38 percent. Such moves in the bond market typically weigh on equity valuations by raising the cost of capital.
All three major indices finished the day lower according to Wall Street Journal figures that placed the S&P 500 at 7718.60 and the Nasdaq Composite at 26506.99. Sectors sensitive to interest rates such as technology and real estate led the declines. The data contrasted with earlier 2026 reports that had shown cooling in the labor market and eased rate hike concerns.
This August reading follows a series of softer employment prints that had led the Federal Reserve to signal greater flexibility on policy a Reuters dispatch from July noted. With inflation remaining the primary focus for policymakers the stronger jobs figure removes some of the recent dovish momentum. Christopher Hodge chief US economist at Natixis told Reuters that inflation data will now carry even greater weight in the central bank’s decision process.
Over the past year US stocks had climbed on expectations of eventual rate relief according to Bloomberg market summaries. The latest release introduces fresh uncertainty and has lifted the CBOE Volatility Index. Market participants will monitor upcoming inflation figures for additional clues ahead of the Federal Open Market Committee gathering.
