Nonfarm Payrolls Post Largest Gain in Five Months
Treasury Yields Rise, 10-Year Hits 4.783%

The three major U.S. stock indices in New York all declined. This was due to growing concerns over interest rate hikes after nonfarm payrolls increased by a much larger-than-expected margin among employment indicators.


[New York Stock Exchange] Interest Rate Hike Concerns Rise on Strong Employment Data... Dow Down 0.51% View original image

On September 4 (local time), the Dow Jones Industrial Average at the New York Stock Exchange (NYSE) closed at 53,414.25, down 271.86 points (0.51%) from the previous trading session.


The Standard & Poor's (S&P) 500 Index fell by 29.11 points (0.38%) to 7,718.60, and the tech-heavy Nasdaq Composite Index closed at 26,506.99, down 77.07 points (0.29%).


The U.S. Department of Labor announced that nonfarm payrolls in August increased by 162,000 from the previous month, marking the largest gain in five months. This figure is triple the experts' projections.


The employment indicator, which far exceeded market expectations, heightened speculation that the Federal Reserve (Fed) could raise interest rates at this month's Federal Open Market Committee (FOMC) meeting.


U.S. President Donald Trump increased pressure on the Fed through his Truth Social account, stating, "If rates are not lowered, the United States will suspend trade with deficit-running countries." In a Q&A session with reporters, he also remarked that the U.S. interest rate should be either 1% or 0.5%.


The yield on the U.S. 2-year Treasury note rose after the data release, standing at 4.379% as of 3:00 p.m. Eastern Time, up 4.7 basis points (1bp = 0.01 percentage points) from the previous session.


The yield on the benchmark 10-year U.S. Treasury note climbed 2.2 basis points to 4.783%. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the federal funds rate (FFR) futures market reflected a 58.4% probability of a rate hike in September, up 9.0 percentage points from the previous day.


The dollar index, which measures the value of the U.S. dollar against six major currencies, rose 0.21% to 99.17. As pressure mounted on risk assets across the board, Bitcoin, which had recently been trading above the $80,000 level, temporarily slipped to the $78,000 range, with cryptocurrencies as a whole showing weakness.


International oil prices rose due to growing concerns about supply disruptions stemming from clashes between Yemeni government forces and rebels. November Brent crude futures ended up 0.80% at $96.28 per barrel, while October West Texas Intermediate (WTI) futures settled 0.20% higher at $91.48 per barrel.



Market attention is now focusing on the August Consumer Price Index (CPI). Many expect the inflation data to be a decisive variable influencing the Federal Reserve's future monetary policy direction.


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