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US Stocks Slide as Strong August Jobs Data Fuels Rate Hike Fears
yonhap_finance · 2026-09-04
US markets retreated as a robust August jobs report sparked concerns over potential Federal Reserve interest rate hikes, pushing bond yields higher.
What Happened
Robust Employment Data: The US labor market showed unexpected strength in August, with non-farm payrolls increasing by 162,000, significantly exceeding expert forecasts. This strong performance has heightened market expectations that the Federal Reserve may implement a rate hike at the upcoming FOMC meeting.
Bond Yields and Policy Outlook: Following the release of the employment data, the 2-year US Treasury yield rose, reflecting increased sensitivity to monetary policy shifts. CME FedWatch data indicates that the probability of a September rate hike jumped to 58.4%, up 9 percentage points from the previous day.
Political Pressure and Market Sentiment: Former President Donald Trump intensified his criticism of the Federal Reserve, demanding lower interest rates and threatening trade consequences. This political pressure, combined with the hawkish economic data, weighed heavily on risk assets, including a decline in Bitcoin prices.
Focus on Inflation Data: Investors are now turning their attention to the upcoming August Consumer Price Index (CPI) report. As the labor market data reinforces the case for higher rates, the inflation figures are expected to be the critical factor determining the Fed's future monetary policy trajectory.