August Jobs Surge Triggers Market Selloff as Rate Hikes Loom

The Dow Jones Industrial Average dropped 271.86 points to 53414.25, while the S&P 500 and Nasdaq Composite retreated 0.38% and 0.29% respectively. Bond markets reacted sharply to the news: the two-year Treasury yield climbed to 4.379%, hovering just 2 basis points below a 52-week high. Fed funds futures now reflect a 60% probability of a rate hike at the upcoming central bank meeting, a stark reversal from sentiment just a day prior.

Corporate volatility dominated individual sectors. Tesla shares fell 5.9% following news of a federal safety investigation into its Cybercab design. Lululemon plummeted 17% after lowering its annual sales guidance for the second time this year. Meanwhile, the credit-scoring landscape shifted as regulator Bill Pulte directed Fannie Mae and Freddie Mac to broaden lender access to VantageScore, causing Fair Isaac shares to slide 17% and Equifax to retreat 6.4%. Amid the uncertainty, gold prices fell 1.4% to $4429.80 an ounce, even as diesel prices hit a record national average of $5.85 per gallon.