Stock market today: Dow, S&P 500, Nasdaq edge lower after hot jobs report fuels Fed rate-hike bets

U.S. stocks fell as traders bet on a Federal Reserve rate hike following a strong August jobs report. The Dow Jones Industrial Average slipped 0.6%, the S&P 500 declined 0.5%, and the Nasdaq dipped 0.4%. The August jobs report showed 162,000 jobs added, surpassing economist expectations and signaling a more robust labor market than recent data suggested.

Traders increased the odds of a Fed rate hike in September to around 60%, according to CME Group. Lululemon stock plummeted 16% after the athleisure apparel company revised its revenue and profit guidance downward for the second quarter. No major earnings reports are scheduled for Friday. Economists are raising their rate hike expectations following the strong jobs report.

UBS economist Andrew Dubinsky anticipates two 25-basis-point hikes in September and December, while Macquarie has also adjusted its forecasts based on the positive jobs data. The strength of the report, combined with comments from Fed Chair Jayne Lublin Warsh on inflation, has shifted market expectations for Fed rate hikes. Bitcoin experienced volatility, surging over 5% on Thursday but reversing below $80,000 after the jobs report.

The U.S. trade deficit and President Trump's threat of a potential embargo also impacted markets, as the president urged the Fed to consider lowering rates to address the issue.