Wall Street dipped on Friday as a robust jobs report raised the probability that the U.S. Federal Reserve will increase its key interest rate at this month’s monetary policy meeting. All three major U.S. indexes closed lower amid a broad selloff ahead of the three-day holiday weekend.
The Labor Department’s August employment report showed the U.S. economy added 162,000 jobs last month, nearly three times the 56,000 consensus, while June and July payrolls were upwardly revised by a total of 55,000 jobs. Labor market participation increased while the unemployment rate held firm at 4.1%. While a stronger-than-expected jobs report would generally be good economic news, markets are interpreting it as a sign that the data-dependent Fed will implement a rate hike at the conclusion of this month’s policy meeting to curb war-related energy price pressures from morphing into broader, more systemic inflation. Financial markets are pricing in a 58.4% likelihood of a 25-basis-point rate hike at the conclusion of the Fed’s September meeting, up from 49.4% on Thursday, according to CME’s FedWatch tool.
According to preliminary data, the S&P 500 .SPX .SPX lost 29.58 points, or 0.38%, to end at 7,718.13 points, while the Nasdaq Composite .IXIC .IXIC lost 78.62 points, or 0.30%, to 26,505.44. The Dow Jones Industrial Average .DJI .DJI fell 279.20 points, or 0.54%, to 53,398.15. Semiconductors .SOX .SOX were clear outperformers, but remain down around 18% this quarter. Software and services .SPLRCIS .SPLRCIS , having gained about 25% over the same period, were clear laggards.
Lululemon Athletica LULU.O LULU.O tumbled after the activewear brand cut its full-year profit and revenue forecasts. Adobe ADBE.O ADBE.O dropped following its announcement that longtime CEO Shantanu Narayen will be succeeded by insider Anil Chakravarthy.
U.S. credit reporting agencies lost ground after Federal Housing Finance Agency Director Bill Pulte said on Thursday he directed Fannie Mae and Freddie Mac, created by the U.S. Congress to support the housing market, to approve all lenders to use the credit scoring system VantageScore. Fair Isaac FICO.N FICO.N , TransUnion TRU.N TRU.N and Equifax EFX.N EFX.N all closed sharply lower.
U.S. markets will close on Monday in observance of the Labor Day holiday.
Reporting by Stephen Culp; Additional reporting by Niket Nishant, Tharuniyaa Lakshmi and Purvi Agarwal in Bengaluru; Editing by Rod Nickel.
(c) Copyright Thomson Reuters 2026.