U.S. jobs surge fuels Fed rate hike bets, weighs on Bitcoin and gold

The U.S. economy added 162,000 jobs in August, nearly triple the 53,000 gain economists polled by Dow Jones had forecast, according to the BLS report released Friday.

The unemployment rate held steady at 4.1%, matching expectations, and both June and July payrolls were revised higher.

Traders read the beat as fuel for a Federal Reserve interest rate hike. The Dow Jones Industrial Average fell 226 points, or 0.4%, while the S&P 500 slid 0.2% and the Nasdaq Composite ticked up 0.1%.

Fed funds futures traders are now pricing a 58% chance of a hike at the central bank's Sept. 15-16 meeting, up from 49.4% the day before, according to the CME FedWatch tool. Treasury yields rose across the curve, with the two-year note touching its highest level since January 2025.

"Great jobs number just announced, breaking all estimates," President Donald Trump wrote on Truth Social Friday. He renewed his demand that the Fed cut rates and threatened to halt trade with countries running a surplus against the U.S. if it doesn't.

Gold gave up ground too, falling to a session low of $4,380 an ounce, on pace for a second straight weekly loss.

Crypto felt the same jolt. Bitcoin had climbed as high as $82,240 earlier Friday—a four-month high—after Fed Governor Christopher Waller signaled Thursday he'd be "inclined to support" holding rates steady, then gave the gain back once the payrolls number hit. The coin fell more than 2% to trade near $79,300 within minutes of the release.

Higher rates make risk-free assets more attractive, so a hike raises the bar for what stocks and crypto need to return to justify holding them over U.S. treasuries. It also tends to strengthen the dollar, which weighs on dollar-priced assets like Bitcoin the same way it weighs on gold. That's the mechanical link between a stronger jobs number and a weaker Bitcoin price.

It's the mirror image of what happened after July's jobs miss, when a soft print cut rate-hike odds and gave crypto room to run. A beat this large closes off the case Waller made a day earlier for standing pat.

Bitcoin opened September near $77,500, a month crypto traders have nicknamed Red September—the token has closed lower in eight of the last 13 Septembers. Friday's reversal fits the script, even after Thursday's short squeeze wiped out more than $415 million in bearish bets.

Crypto market snapshot

Overall, crypto sentiment cooled but stayed bullish. CoinMarketCap's Fear and Greed Index read 75, still within "greed" territory, while total crypto market capitalization held near $2.67 trillion, up 0.11% on the day. It’s worth noting, though, bullish sentiment has receded some from last week’s “extreme greed” readings.

Spot Bitcoin ETFs logged $730.8 million in net inflows, extending the buying that started with Thursday's rate-pause optimism. CoinMarketCap's Altcoin Season Index sat at 38, still favoring Bitcoin over the broader field.

The Fed's rate decision lands September 15-16, the first hike under consideration since the tightening cycle that ended in July 2023. The next jobs report, covering September payrolls, is due October 2.