US stocks fall on rising expectations of rate hike by Federal Reserve

The United States benchmark indices moved sharply lower on Friday, September 4, as stronger than anticipated August payrolls data increased expectations that US Federal Reserve could raise interest rates at its next rate setting meeting due later this month.

Dow Jones Industrial Average fell 0.5%, S&P 500 index dropped 0.27% and tech heavy Nasdaq index declined 0.2%.

Total nonfarm payroll employment increased by 162,000 in August, and the unemployment rate was unchanged at 4.1%, the US Bureau of Labor Statistics reported on Friday.

Employment increased in food services and bars and in local government education. The information industry lost jobs.

Employment in food services and drinking places increased by 59,000 in August, well above the average monthly gain of 12,000 over the prior 12 months, Bureau of Labor Statistics said.

Local government education added 42,000 jobs in August, largely offsetting a decrease in the prior month.

In August, employment in manufacturing continued its upward trend (+16,000) and is up by 58,000 since a recent low in December 2025. Employment in machinery manufacturing (+6,000) and in fabricated metal product manufacturing (+6,000) continued trending up in August, Bureau of Labor added.

Strategy was top gainer in the Nasdaq 100 index, the stock rose 17.56% to $144.82. Palantir, SpaceX, Axos Enterprises, CrowdStrike, Thomson Reuters, Tesla and CoreWeave also rose between 4.5% and 7.7%.

On the other hand, Seagate Technology, Baker Hughes, NXP Semiconductors, Mondelez, Western Digital, AppLovin and Constellation Energy were top losers in the Nasdaq index.