Wall Street Falls as Strong Jobs Report Fuels Rate Hike Fears

TDT | Agencies

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Wall Street ended lower on Friday after a stronger-than-expected U.S. jobs report raised concerns that the Federal Reserve could keep interest rates higher for longer.

The Dow Jones Industrial Average fell 271.86 points, or 0.51%, to close at 53,414.25. The S&P 500 declined 0.38% to 7,718.60, while the Nasdaq Composite dropped 0.29% to 26,506.99.

The main pressure came from August employment data, which showed the U.S. economy added 162,000 jobs, well above economists' expectations. The stronger labour market prompted investors to reassess the outlook for monetary policy and increased expectations of a possible rate hike at the Federal Reserve's September meeting.

Higher interest rates could increase borrowing costs for businesses and consumers, while putting pressure on high-growth technology stocks.

Treasury yields and the U.S. dollar also strengthened following the jobs report.

Oil prices remained elevated, with crude trading between $91 and $96 a barrel amid continuing geopolitical tensions involving the United States and Iran. Higher energy prices have added to concerns about persistent inflation.

Corporate developments also influenced trading. Nvidia gained 0.84%, while Tesla fell 5.92% following a new regulatory investigation involving its autonomous vehicle programme. Lululemon plunged 17% after lowering its financial outlook.

With U.S. markets closed Monday for the Labor Day holiday, investors will turn their attention to inflation data later in the week. The Producer Price Index and Consumer Price Index are expected to provide further clues about the Federal Reserve's next move.

The combination of strong employment and persistent inflation could keep markets volatile in the weeks ahead.