U.S. stocks close mixed as chip shares surge and TSMC ADR gains nearly 3%

U.S. stocks finished mixed on Friday after stronger-than-expected August employment data led investors to consider whether the Federal Reserve might raise interest rates at its next meeting.

The Dow Jones Industrial Average fell 271.86 points, or 0.51%, to 53,414.25. The S&P 500 lost 0.38% to 7,718.60, while the Nasdaq declined 0.29% to 26,506.99.

Chip stocks moved in the opposite direction. The Philadelphia Semiconductor Index jumped 3.37% to 11,735.26, and Taiwan Semiconductor Manufacturing Co.’s American depositary receipt rose $11.90, or 2.85%, to close at $428.91.

The U.S. Bureau of Labor Statistics reported 162,000 new nonfarm jobs in August, well above the market forecast of 53,000. The unemployment rate remained at 4.1%. Although strong employment data usually supports the economy, investors interpreted the report as a possible signal that the Fed could tighten policy to contain inflation.

Treasury yields rose after the report, with the two-year yield reaching its highest level since January 2025. The CME FedWatch tool showed traders assigning a 58% probability to a rate increase within weeks.

Tesla fell nearly 6% after unveiling its highly anticipated Cybercab, its biggest one-day decline since July 23. Nvidia gained 0.84%, while Microsoft fell 2.04%, Apple dropped 2.51%, Amazon slipped 0.15% and Alphabet lost 1.1%. Meta rose 1%. U.S. markets will close Monday for the Labor Day holiday.