U.S. stocks traded mixed Friday morning as a surprisingly strong August employment report pushed Treasury yields higher and revived expectations that the Federal Reserve could raise interest rates this month.
At about 10:10 a.m. Eastern time, the S&P 500 was near 7,741, down roughly 0.1%, while the Dow Jones Industrial Average was around 53,500, off about 0.3%. The Nasdaq Composite was roughly flat to slightly higher as strength in semiconductor stocks helped offset weakness across several other megacap technology names.
The reaction followed a strong Thursday session, when the Dow rose 1.18%, the S&P 500 gained 1.06% and the Nasdaq advanced 1.40% after Federal Reserve Gov. Christopher Waller signaled he could support keeping rates unchanged if inflation pressures continue to ease.
Strong August Jobs Report Brings Fed Rate Hike Back Into Focus
The U.S. economy added 162,000 jobs in August, far above the 56,000 increase economists surveyed by Reuters had expected. The unemployment rate held at 4.1%, while July payroll growth was revised sharply higher to 21,000 from an initially reported decline of 23,000.
Average hourly earnings increased 0.3% from July and 3.1% from a year earlier. The labor-force participation rate also rose to 61.6% from 61.4%. The figures portrayed a labor market that remains resilient despite slower hiring earlier in the summer.
Rate markets reacted quickly. Short-term interest-rate futures implied about a 59% probability of a Fed rate increase at the Sept. 15-16 meeting, compared with about 55% before the report. The two-year Treasury yield rose to about 4.38%, while the benchmark 10-year yield traded near 4.78%.
S&P 500 Holds Above Key Trend Support
The S&P 500 remained close to recent highs Friday morning even as the jobs report put renewed pressure on rate-sensitive assets.
S&P 500 Daily Price Chart. Source: TradingView
The index was at 7,740.75 at 10:07 a.m. ET, after trading between 7,733.93 and 7,750.19 during the session. More importantly for the broader trend, the S&P 500 remained well above its 50-day exponential moving average at 7,598.51.
That keeps the medium-term structure constructive despite Friday's modest pullback. The 7,800 area is the clearest nearby resistance zone visible on the chart, while the 7,600 region remains a more important trend-support area around the rising 50-day average.
The 14-day relative strength index stood at 57.6. That reading points to positive momentum but remains below the 70 level commonly associated with overbought conditions.
Dow Jones Pulls Back After Thursday Rally
The Dow underperformed the broader market Friday as higher yields weighed on rate-sensitive and economically exposed shares.
Dow Jones Industrial Average Price Chart. Source: Investing.com
The Dow was trading near 53,500, down roughly 184 points, or 0.3%, when the chart was captured. The decline followed Thursday's 624-point rally and left the blue-chip index below the rebound highs reached earlier in the week.
The short-term chart also shows repeated volatility around the 53,500 area. Holding that zone would keep the latest recovery attempt intact, while renewed selling toward the early-September lows would signal that Thursday's jump failed to establish lasting upside momentum.
Nvidia Leads Chip Strength as Tesla, Apple and Banks Fall
Market breadth was considerably weaker than the headline indexes suggested, with losses spread across financials, health care, energy and parts of the technology sector.
Stock Market Heatmap. Source: TradingView
At about 10:10 a.m. ET, Nvidia was up 2.4%, AMD gained about 3.5% and Intel rose roughly 3.5%, making semiconductors one of the market's strongest pockets. Nvidia remained in focus after agreeing to buy AI developer platform Hugging Face for about $12.9 billion.
Elsewhere, Apple fell about 1.7%, Microsoft lost roughly 1.3% and Tesla dropped more than 5%. Tesla's decline came as the National Highway Traffic Safety Administration said it was evaluating the automaker's rollout of its steering-wheel-free Cybercab robotaxi in Austin, Texas.
Major banks were also broadly lower on the heatmap, including JPMorgan Chase and Bank of America, reinforcing the Dow's weaker performance.
For Wall Street, the central question has shifted back to monetary policy. Friday's jobs report showed the economy still has meaningful momentum, but that strength also gives the Fed more room to keep policy restrictive if inflation remains elevated. With the September meeting approaching, next week's U.S. inflation data could determine whether Friday's renewed rate-hike expectations persist, and whether the S&P 500 can finally break through the 7,800 area or retreats toward deeper support.