Wall Street Drops as Jobs Beat Lifts Fed Hike Odds to 58% — SkimNews
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- August nonfarm payrolls surged to 162,000, nearly triple the 56,000 consensus, with June and July revised up by a combined 55,000; unemployment held at 4.1% and labor participation rose.
- Fed rate-hike probability jumped to 58.4% for the September meeting (from 49.4% Thursday) on CME's FedWatch tool, as markets read the jobs beat as a green light for a 25bp hike to preempt energy-driven inflation.
- All three major indexes closed lower—Dow -0.51%, S&P 500 -0.38%, Nasdaq -0.29%—in a broad selloff ahead of the three-day Labor Day holiday, leaving the week essentially flat.
- Lululemon Athletica tumbled 17.4% after cutting its full-year profit and revenue forecasts.
- Adobe fell 6.7% after naming insider Anil Chakravarthy to succeed longtime CEO Shantanu Narayen.
- Credit-scoring agencies sold off sharply—Fair Isaac -16.7%, TransUnion -5.9%, Equifax -6.4%—after FHFA Director Bill Pulte directed Fannie Mae and Freddie Mac to approve VantageScore for all lenders.
- Semiconductors were the lone sector standout at +3.4%, though still down 17.8% on the quarter, while software and services dropped 2.1% after a 24% quarterly gain.
Why it matters: The August payrolls beat nearly tripled expectations, and the market's hawkish read pushed implied Fed hike odds up roughly 9 percentage points in a single session. With CPI and PPI due next week before the September meeting, Friday's repricing could deepen if inflation confirms the 'hot economy' narrative—putting rate-sensitive sectors like housing credit and software directly in the crosshairs.
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