NEW YORK, New York - U.S. stocks ended the final trading session of the week in the red on Friday, as a blockbuster non-farm payrolls report reinforced expectations that the Federal Reserve will keep interest rates elevated for longer, overshadowing earlier optimism from corporate earnings.

The Non-Farm Payrolls report says 162,000 jobs were added to the U.S. economy last month, well ahead of the 56,000 expected.

"Total nonfarm payroll employment increased by 162,000 in August, and the unemployment rate was unchanged at 4.1 percent," the U.S. Bureau of Labor Statistics said in a statement Friday. "Employment increased in food services and drinking places and in local government education. The information industry lost jobs," the report said.

The Standard and Poor's 500 fell 29.30 points to close at 7,718.41, a decline of 0.38 percent. The broad-market index traded between a low of 7,706.12 and a high of 7,750.19 during the session, with volume reaching 2.468 billion shares. The benchmark now sits well below its 52-week high of 7,816.70, though it remains far above its low of 6,316.91.

The Dow Jones Industrial Average posted the steepest losses among the major U.S. averages, dropping 272.51 points to finish at 53,413.60, a fall of 0.51 percent. The blue-chip index fluctuated between 53,289.88 and 53,635.35 on the day, with 373.437 million shares changing hands. The Dow's 52-week range stands between 45,057.28 and 54,744.33.

The NASDAQ Composite showed relative resilience but still ended in negative territory, shedding 77.07 points to settle at 26,506.99, a loss of 0.29 percent. The tech-heavy index moved between 26,444.84 and 26,628.58, with trading volume of 4.934 billion shares. Its 52-week high of 27,190.21 now looks increasingly distant as rate-sensitive growth stocks came under pressure.

What Drove the Selloff?

Friday's losses were squarely attributed to the stronger-than-expected U.S. jobs report, which showed accelerating wage growth and robust hiring. Traders swiftly repriced the likelihood of further Fed tightening, sending Treasury yields surging and pressuring equities across the board. Defensive sectors such as utilities and consumer staples outperformed, while cyclicals and tech names bore the brunt of the selloff.

Outlook

With the Fed's September meeting looming, investors and traders now turn their focus to next week's inflation data for further clues on the policy path. Analysts warned that if price pressures remain sticky, the recent pullback could deepen, with the S&P 500 potentially testing its 50-day moving average in the sessions ahead. For now, the overarching narrative remains one of higher-for-longer rates, a theme that has repeatedly capped equity gains throughout 2026.

U.S. Dollar Strengthens Broadly After NFP Blowout; Only Aussie Defies the Greenback

The U.S. dollar staged a powerful rally on Friday, surging against nearly all major currencies after the latest non-farm payrolls (NFP) report blew past expectations, reinforcing bets that the Federal Reserve will maintain its hawkish stance. The only notable exception was the Australian dollar, which managed to eke out a gain against the greenback in a session defined by broad-based USD strength.

The headline NFP data showed the U.S. economy added far more jobs than anticipated in August, sending Treasury yields higher and fueling demand for the dollar as traders priced in a higher-for-longer interest rate environment.

Euro and Pound Ease

The euro came under sustained selling pressure, with the EUR-USD pair sliding to 1.1615, a decline of 0.09 percent. The single currency struggled to find footing as the dollar's yield advantage widened sharply following the jobs report.

The British pound fared little better. GBP-USD dropped to 1.3520, losing 0.04 percent, as traders digested the stronger U.S. data alongside lingering concerns over the UK's economic outlook. Sterling briefly tested lower levels before settling near the session's trough.

Yen and Franc Hit Hard

Safe-haven currencies were not spared from the dollar's onslaught on Friday. The USD-JPY pair surged to 156.23, a jump of 0.27 percent, as the interest rate differential between U.S. Treasuries and Japanese government bonds widened dramatically. The yen continued its relentless slide, with intervention risks remaining in the background but failing to stem the tide.

The Swiss franc also tumbled against the resurgent dollar. USD-CHF climbed to 0.8097, a gain of 0.27 percent, as investors fled into the greenback for both yield and safety, leaving the franc nursing losses.

Loonie Lags as Oil Fails to Rescue

The Canadian dollar could not escape the broader USD strength, despite crude oil prices holding relatively firm. The USD-CAD pair rose to 1.3830 on Friday, advancing 0.26 percent, as the loonie succumbed to the gravitational pull of a stronger U.S. currency and mounting concerns over global demand.

Aussie Bucks the Trend

In a notable divergence, the Australian dollar stood alone as the only major currency to post a gain against the U.S. dollar on Friday. The AUD-USD pair edged higher to 0.7207, rising 0.08 percent. Traders pointed to resilient commodity prices and renewed optimism around China's economic stimulus measures as key supports for the Aussie, allowing it to shrug off the otherwise relentless USD bid.

Outlook

The NFP print has firmly put the Federal Reserve back in the driver's seat, with markets now pricing in increased odds of another rate hike before year-end. Analysts said the dollar's trajectory will hinge on next week's inflation data, but Friday's price action suggested the greenback remains the currency of choice in a higher-yield environment. The Australian dollar's relative strength, however, hints at a commodity-led resilience that could continue to set it apart from its G10 peers in the sessions ahead.

World Stock Markets End Choppy Week on Mixed Note as Indexes Show Cautious Sentiment

Global stock markets closed Friday with a mixed performance, as investors weighed economic data and corporate news against ongoing geopolitical uncertainties. Canadian, UK, and European bourses showed little conviction, while Asian markets rallied strongly, led by a surge in Hong Kong and South Korean equities.

UK and European Markets Stagnate

The FTSE 100 in London slipped into negative territory, losing 0.43 points to close at 10,831.09, a change of -0.00 percent. The blue-chip index hovered between a low of 10,791.43 and a high of 10,843.12 during the day.

Europe's major indexes finished the session largely flat, reflecting a cautious end to the trading week. 

In Germany, the DAX P managed a modest gain, adding 43.08 points to end at 26,046.40, an increase of 0.17 percent. The index traded between 25,958.70 and 26,167.93 on the day.

France's CAC 40 also edged lower, declining by 7.63 points to settle at 8,278.77, a drop of 0.09 percent. It reached a daily high of 8,297.07 and a low of 8,254.68.

The broader EURO STOXX 50 I rose by 10.34 points, closing at 6,392.93 for a gain of 0.16 percent, while the Euronext 100 Index advanced 3.71 points to 1,910.53, an increase of 0.19 percent. Meanwhile, Belgium's BEL 20 underperformed, falling 26.51 points to 5,852.54, a decline of 0.45 percent.

Canadian Market Follows Suit

 Canada's S&P/TSX Composite Index also closed lower, falling 119.32 points to 36,513.80, a decline of 0.33 percent. The index saw trading volume of 212.446 million shares, as resource and financial stocks weighed on the benchmark.

Asian Markets Shine

Asian equities delivered a far more upbeat performance, with Hong Kong leading the charge. The HANG SENG INDEX soared 437.56 points to finish at 25,650.87, a robust gain of 1.74 percent, rebounding from a low of 25,515.74 and nearing a high of 25,791.38.

In Singapore on Friday, the STI Index followed suit, climbing 54.25 points to 5,801.96, a rise of 0.94 percent, after touching a high of 5,828.50 earlier in the session.

Japan's Nikkei 225 also posted solid gains, jumping 806.46 points to close at 65,020.94, an increase of 1.26 percent. The index traded between 64,228.47 and 65,182.45.

In South Korea, the KOSPI Composite Index advanced 107.73 points to 6,687.21, a gain of 1.64 percent, with trading volume of 238,152 lots. Taiwan's TSEC Capitalization Weighted Index rose 693.47 points to 46,551.13, climbing 1.51 percent, after hitting a high of 46,620.96.

In India, the S&P BSE SENSEX added 362.57 points to close at 76,515.43, a 0.48 percent gain, after reaching an intraday high of 76,883.14.

Elsewhere in the region, Malaysia's FTSE Bursa Malaysia KLCI declined 7.03 points to 1,708.10, a drop of 0.41 percent, while in Indonesia on Friday, the IDX Composite lost 31.42 points to settle at 6,636.48, a fall of 0.47 percent.

Australia's benchmarks ended marginally lower. The S&P/ASX 200 fell 14.20 points to 9,005.90, a decline of 0.16 percent, while the broader ALL ORDINARIES slipped 2.30 points to 9,196.00, a fractional loss of 0.03 percent.

Across the Tasman, in New Zealand, the S&P/NZX 50 bucked the regional trend to the upside, climbing 128.00 points to 13,974.18, a gain of 0.92 percent.

Mainland China 

China's SSE Composite Index closed lower, shedding 11.97 points to finish at 3,930.12, a decline of 0.30 percent, with volume reaching 2.189 billion shares. The index fluctuated between 3,915.22 and 3,980.20.

Middle East and Africa

Israel's TA-125 rose 30.64 points to 4,200.19, an increase of 0.73 percent. Mother other markets in the Middle East were closed on Friday and will reopen on Sunday.

In South Africa, the Top 40 USD Net TRI Index advanced 22.51 points to 7,359.56, a gain of 0.31 percent.

(This report incorporates quotes retrieved with the assistance of artificial intelligence).

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