US stocks drop as blowout jobs report sends Treasury yields soaring

The 10-year yield spiked as much as 14 basis points to 4.85% after the Labor Department reported that 336,000 new jobs were added in September.

• Stock futures fell Friday after the blowout September jobs report sent US bond yields soaring.
• Last month, 336,000 new positions were added, well above estimates for 170,000.
• Bonds extended their sell-off, with the 10-year Treasury yield jumping as much as 14 basis points.

US stocks fell Friday as the September jobs report came in much stronger than estimated, blunting hopes for a more dovish Federal Reserve.

The Labor Department reported that 336,000 new jobs were added, well above forecasts for 170,000. However, wage growth did slow, and unemployment held at 3.8%.

The report added fire to the ongoing Treasury market sell-off, causing the 10-year yield to spike as much as 14 basis points to 4.85% before easing back a bit. Meanwhile, the 30-year bond rate surged past 5%.

"Not only does today's report indicate the economy is almost too hot to handle and the Fed will need to respond with more rate hikes, it reinforces the higher-for-longer narrative that has been spooking bond markets for the past few weeks," Principal Asset Management's Seema Shah said. "Markets want the perfect landing and instead they are facing an upward sloping path." 

Here's where US indexes stood at the 9:30 a.m. opening bell on Friday: 

• S&P 500: 4,237.23, down 0.49%

• Dow Jones Industrial Average: 33,027.70, down 0.28% (91.87 points)

• Nasdaq Composite: 13,157.15, down 0.47%

Here's what else happened today:

• Iraq is banning the greenback in cash transactions, fueling de-dollarization.  
• The stock market sell-off has pulled down names such as Coca-Cola and Bank of America to their lowest levels this year.
• Jeremy Grantham said the S&P 500 could nosedive 50% if "the wheels fall off."
• Here's how the bond-market rout compares to four other market crashes.

In commodities, bonds, and crypto: 

• West Texas Intermediate crude oil inched 0.86% lower to $81.69 a barrel. Brent crude, the international benchmark, slipped 0.75% to $83.78 a barrel.
• Gold fell 0.34% to $1,813.9 per ounce. 
• The yield on the 10-year Treasury bond jumped 11.6 basis points to 4.832%. 
• Bitcoin edged 0.14% lower to $27,562.