Yields, dollar rise, stocks ease after solid US jobs report

NEW YORK, September 4 - Treasury yields and the U.S. dollar climbed higher while stocks declined following robust U.S. job growth data that increased expectations for a September interest rate increase from the Federal Reserve. All three major U.S. stock indices closed lower in a widespread sell-off ahead of a three-day holiday weekend.

Global stocks also fell. Nonfarm payrolls increased by 162,000 positions last month, following a revised rise of 21,000 in July. Economists surveyed by Reuters had predicted an increase of 56,000 after a previously reported decline of 23,000 in July. The unemployment rate remained unchanged. Two-year yields, which are especially responsive to changes in monetary policy, led the rise in Treasuries and were last up 4 basis points at 4.37 percent.

The yield momentarily peaked at 4.4246 percent, its highest since January 2025. The yield on 10-year Treasury notes rose nearly 2 basis points to around 4.78 percent, following its peak of 4.812 percent after the data release. According to Bret Kenwell, a U.S. investment analyst at eToro in New York, the labor market's strength suggests that inflation remains the primary concern for the Federal Reserve.

Next week's consumer prices report and the Fed's mid-September decision will be closely watched by investors. After the jobs report, short-term interest-rate futures indicated a 65 percent chance of a rate hike at the Fed's September meeting, up from about 55 percent before the report. By New York trade hours, that figure had dropped to 57 percent.

Producer price inflation data is expected on Thursday, and the consumer price inflation report is scheduled for the following Friday. Economists anticipate the core CPI to decline to 2.4 percent on the year from 2.5 percent in July. Oil prices and the dollar also rose due to ongoing attacks in the U.S.-Iran conflict, which raised concerns about increasing costs.

Brent crude futures settled at $92.68 a barrel, up 76 cents or 0.8 percent, while West Texas Intermediate crude futures ended at $91.48 a barrel, up 18 cents or 0.20 percent. For the week, Brent crude rose 7.6 percent, and U.S. crude gained nearly 10 percent, due to supply disruptions in the Middle East caused by the war. Adobe shares fell 6.7 percent after announcing that longtime CEO Shantanu Narayen would be succeeded by insider Anil Chakravarthy.

The Dow Jones Industrial Average dropped 271.86 points or 0.51 percent to 53,414.25, the S&P 500 declined by 29.11 points or 0.38 percent to 7,718.60, and the Nasdaq Composite fell by 77.07 points or 0.29 percent to 26,506.99. MSCI's global stock index fell 1.09 points or 0.09 percent to 1,153.65, while the pan-European STOXX 600 index rose 0.12 percent.

The dollar index, which gauges the greenback against a basket of currencies, including the yen and the euro, increased by 0.21 percent to 99.17, with the euro dropping 0.12 percent to $1.1611. The yen strengthened 0.26 percent to 156.19 against the Japanese yen, testing the 155.21 level, its highest since May 6.