Stronger American Payrolls Revive Rate-Hike Expectations and Pull Silver Down 3%

American employers added 162,000 jobs in August, far above the 53,000 that economists polled by Dow Jones had expected, and the unemployment rate held at 4.1%. Payroll figures for June and July were revised upward. Bond yields rose and equities fell on the session, with the Dow Jones Industrial Average down 271.86 points, or 0.51%, to 53,414.25, the S&P 500 down 0.38% to 7,718.60 and the Nasdaq Composite down 0.29% to 26,506.99, TheStreet reported.

Precious metals fell as the dollar strengthened. Silver dropped about 3% to below $65 an ounce at the end of the week, and gold traded near $4,420 an ounce in early September. Both metals have risen sharply this year, and both are now pricing in the expectation that the Federal Reserve will hold policy tighter for longer instead of easing ahead of a slowdown.

Emerging market equities showed the same pattern through the currency channel. India's Nifty 50 index fell for a fourth straight week and traded below the 24,000 level, and Economic Times reported that analysts are advising positioning built around volatility rather than direction. When American rates rise and the dollar strengthens, capital leaves markets that price growth off cheap external funding, and India has been one of the most exposed.

The Federal Reserve's next decision is genuinely open. Consumer and producer price releases due this week will decide whether officials treat the labour data as evidence of an economy that still needs restraint, or as a lagging signal that inflation is already receding.