U.S. stocks fell Friday on worries that good news on the job market may be too good and prove to be bad for Wall Street by keeping inflation and interest rates high.

The S&P 500 tumbled 1.5% to close its fourth losing week in the last five. The Dow Jones industrial average dropped 696 points, or 1.6%, and the Nasdaq composite sank 1.6%.

Stocks took their cue from the bond market, where yields leaped to crank up the pressure after a report said U.S. employers added many more jobs to their payrolls last month than economists expected.

Such strength in hiring is of course good news for workers looking for jobs. But it could also keep upward pressure on inflation. That in turn could dissuade the Federal Reserve from delivering the cuts to interest rates that Wall Street loves.

Smaller companies can take worse hits from higher interest rates than their bigger rivals because of the need for many to borrow to grow. The Russell 2000 index of smaller stocks slumped 2.2%.

Constellation Brands tumbled 17.1% for the biggest loss in the S&P 500 after the seller of Modelo beer and Robert Mondavi wine reported weaker profit and revenue for the latest quarter than analysts expected.

Insurance companies were also under pressure as wildfires continue to burn in the Los Angeles area. Allstate fell 5.6%, Travelers dropped 4.3% and Chubb lost 3.4%.

Delta Air Lines was able to fly 9% higher because it delivered a stronger profit report for the last three months of 2024 than analysts expected.

All told, the S&P 500 fell 91.21 points to 5,827.04. The Dow dropped 696.75 to 41,938.45, and the Nasdaq composite sank 317.25 to 19,161.63.

In the bond market, the yield on the 10-year Treasury jumped to 4.76% from 4.68% late Thursday. In September, it was below 3.65%, marking a major move for the bond market.

The yield on the two-year Treasury, which moves more closely with expectations for what the Fed will do in the near term, climbed to 4.38% from 4.27% late Thursday.

— Associated Press