Short-Term Treasury Yields Climb After Strong Jobs Report -- WSJ

By Caitlin McCabe

A hotter-than-expected jobs report is sending U.S. stocks and short-term bond prices lower today, as traders boost bets on a rate hike from the Federal Reserve this month.

U.S. Treasury yields initially jumped after the latest report from the Labor Department, though in midday trading, only shorter-term Treasurys were higher. The Dow industrials led stocks lower, falling about 250 points.

Friday's jobs report showed that the U.S. economy added 162,000 jobs in August. That was about three times the amount expected by economists and marked a sharp increase from the revised 21,000 gain for July.

This comes as investors anxiously try to discern whether the Fed will lift rates on Sept. 16. Officials have made clear that inflation data will play the biggest role in their decision-though as my colleague Nick Timiraos points out, today's jobs report helps remove one obstacle to doing so. Investors now see a 60% chance that the Fed will hike this month, up from 52% before the report's release.

In a reminder of the inflation pressure facing the Fed, diesel prices hit a new all-time high of $5.85 a gallon on Friday, surpassing their previous record from 2022.

Another pressure the Fed faces is political. After Friday's report, President Trump took to social-media to encourage the central bank to lower rates. "Lower the interest rates because the U.S.A. is a much stronger credit than it was just a short time ago!" he wrote.

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September 04, 2026 14:03 ET (18:03 GMT)