Hot US jobs data revives rate‑hike bets, knocking stocks and bonds

A stronger‑than‑expected US jobs report on September 4 rattled global markets, sending both stocks and Treasuries lower as traders quickly repriced the odds of another Federal Reserve rate hike this month. Nonfarm payrolls rose by 162,000, above consensus forecasts, reviving the narrative that the Fed may not be done tightening. The Dow Jones Industrial Average fell about 0.5%, while the tech‑heavy Nasdaq Composite slipped 0.3%.

Fed funds futures, tracked by tools such as CME’s FedWatch, now imply better‑than‑even odds of a 25‑basis‑point hike at the September 16 FOMC meeting, up notably from the day before. Higher expected policy rates lift discount rates on future earnings, pressuring growth stocks and pushing down the prices of existing bonds whose coupons look less attractive.

Rising yields can also weigh on “yield‑less” assets such as gold and bitcoin, although lingering worries about sticky inflation complicate the picture. For now, investors are focused on how long a higher‑for‑longer stance might last. Short‑term volatility is likely to remain elevated, while longer‑term investors are watching to see whether the latest pullback turns into a genuine buying opportunity or a warning sign of a deeper correction.