Wall Street retreats as strong jobs data raises rate hike bets, credit reporting stocks slump

Wall Street’s major stock indices fell on Friday after stronger-than-expected US employment data increased expectations that the Federal Reserve could raise interest rates in September.

Data from the US Bureau of Labor Statistics showed that the US economy added 162,000 jobs in August 2026, marking the strongest monthly increase in five months. July’s job growth was also revised upward to 23,000.

The August increase was significantly above economists’ expectations of 56,000 jobs, raising concerns that a resilient labour market could give the Fed less reason to ease monetary policy.

As of 2:07 p.m. Eastern Time, the S&P 500 fell 0.5%. The Dow Jones Industrial Average was down 0.5% and the Nasdaq Composite fell 0.5%.

At 9:44 a.m. ET, the Dow Jones Industrial Average fell 176.48 points, or 0.33%, to 53,509.63, the S&P 500 lost 12.48 points, or 0.16%, to 7,735.23, and the Nasdaq Composite lost 9.14 points, or 0.04%, to 26,573.86.

At the open, the Dow Jones Industrial Average fell 101.2 points, or 0.19%, to 53,584.89. The S&P 500 rose 2.5 points, or 0.03%, to 7,750.19​, while the Nasdaq Composite rose 3.8 points, or 0.01%, to 26,587.896.

Odds of September rate hike rise

Following the jobs report, traders increased their bets on a September interest rate increase. Futures markets put the probability of a rate hike at 60.2%, up from 49.4% on Thursday.

The stronger labour market data added to concerns that inflationary pressures could remain persistent, potentially prompting the central bank to maintain a tighter monetary policy stance for longer.

Briefing.com analyst Patrick O'Hare described the report as "a bit of a shocker," adding that "the good news on nonfarm payrolls, though, was quickly interpreted as bad news for monetary policy."

Oil prices retreat from recent highs

Crude oil prices declined after recently touching higher levels. Renewed attacks during the ongoing US-Iran war this week had pushed oil prices higher, adding to concerns over rising energy costs and their potential impact on inflation.

US crude futures fell 0.65% to $90.70 a barrel, while Brent crude declined 0.19% to $95.34 per barrel.

Key Stock Movers

Among individual stocks, Lululemon Athletica was one of the biggest decliners, with its shares tumbling 16.9%.

The athletic apparel company lowered its full-year revenue and profit forecasts, weighing heavily on investor sentiment and raising concerns about the outlook for consumer spending.

Adobe shares declined 7.3% after the Photoshop maker announced that longtime CEO Shantanu Narayen would step down and be succeeded by company insider Anil Chakravarthy.

Credit reporting companies also came under heavy selling pressure.

Fair Isaac shares plunged 20%, while TransUnion declined 9.4% and Equifax fell 8%.

The declines came after US Director of Federal Housing Bill Pulte said on Thursday that he had directed Fannie Mae and Freddie Mac to approve all lenders to use the VantageScore credit scoring system.

Fannie Mae and Freddie Mac, created by the US Congress to support the housing market, have historically played an important role in the mortgage industry.

Bullion

Gold prices fell on Friday after solid US jobs data boosted hopes for rate hike.

By 10:50 a.m. EDT (1447 GMT), spot gold slipped 1.1% to $4,422.91 per ounce. US gold futures for December delivery dropped 1.5% to $4,469.80 per ounce.

Among other metals, spot silver fell 1.7% to $65.79 per ounce, platinum slipped 0.8% to $1,811.83 per ounce, and palladium dropped 1.6% to $1,397.75.