(Updates with index/price moves from the first paragraph.)
US equity indexes fell as market expectations of an interest rate increase as early as this month jumped after the economy added almost triple the jobs expected in August.
The Nasdaq Composite declined 0.3% to 26,501.9, the S&P 500 retreated 0.4% to 7,716.9, and the Dow Jones Industrial Average declined 0.5% to 53,435.8 ahead of Friday's close. All sectors except industrials and technology fell. Consumer discretionary, communication services and healthcare led decliners.
Total nonfarm payrolls rose by 162,000 last month, the Bureau of Labor Statistics said Friday, compared with a 55,000 increase projected in a Bloomberg-compiled survey. July's tally was revised to show a gain of 21,000 from a 23,000 fall, while June's increase was adjusted upward by 11,000.
"This is the strongest pace of job expansion in five months, punctuated by also being three times greater than expected and the positive upward revisions to prior months," said Thomas Feltmate, senior economist at TD Economics. "On balance, we like the breadth and depth of this jobs report. Markets have taken note too."
The probability of the Federal Reserve raising its target rate by 25 basis points to 3.75%-4.0% in September jumped to 58% after midday from 49% a day ago, according to the CME FedWatch tool. The remaining likelihood is that policy will remain on hold.
President Donald Trump called on the Fed to lower interest rates, saying the US economy is a stronger credit than it was previously. In a post on Truth Social, Trump said job growth exceeded estimates and argued that a "strong country means a lower interest rate." Trump urged the Fed to adopt the world's "lowest rate," warning he could halt trade with countries with which the US maintains trade deficits.
Most US Treasury yields rose, with the two-year up 4.5 basis points to 4.38%. The 10-year yield advanced 2.2 basis points to 4.78% in the final leg of trading.