01:32 PM EST, 03/08/2024 (MT Newswires) -- US benchmark stock indexes traded lower after midday Friday as a jump in the jobless rate to a two-year high and a stronger-than-expected expansion in payrolls left bets for interest-rate cuts almost unchanged.

The S&P 500 slid 0.6% to 5,127.3, and the Nasdaq Composite fell 1.1% to 16,094.6, erasing earlier gains. The Dow Jones Industrial Average retreated less than 0.1% to 38,775.9. Real estate led gainers, while technology paced the decliners.

Nonfarm payrolls rose by 275,000 in February, the Bureau of Labor Statistics reported Friday. The consensus was for a 200,000 gain in a survey compiled by Bloomberg. January gains were revised lower by 124,000 to 229,000 and by 43,000 for December. The unemployment rate rose to 3.9% from 3.7%, beating the consensus for no change. Average hourly earnings climbed 0.1%, lagging behind the Street's 0.2% forecast. On an annual basis, wages climbed 4.3%, in line with market expectations.

"On the surface, this was a very strong employment report with payrolls coming in well above the consensus forecast," TD Economics Senior Economist Thomas Feltmate wrote in a note. "But February's upward surprise needs to be weighed against the downward revisions to the prior two months, and the fact that the unemployment rate ticked up to a two-year high."

Traders are pricing in a 57.2% probability the Federal Reserve will cut rates by 25 basis points in June, versus 57.1% a day ago before the payrolls data, the CME Group's FedWatch tool showed by Friday afternoon. They only see a 25% chance the central bank will kick off its easing cycle in May and a 3% probability of it starting in March.

Gold for April delivery on the Comex soared 1.3% to $2,193 per troy ounce after touching a record $2,203. Silver climbed 0.2% to $24.63 per troy ounce.

"Gold achieving new highs on the back of little to no change in the backdrop or grander narrative for gold gives us mixed feelings," Christopher Louney, a commodities strategist at RBC Capital Markets, said in a note. "The eventual rate cut narrative (set to come to fruition in June) remains as gold positive as ever, and geopolitical risks [such as the war in Gaza] have been underappreciated in our view."

The US 10-year Treasury yield slipped 1.3 basis points to 4.08%, while the two-year fell 2.8 basis points to 4.49%.

West Texas Intermediate crude oil fell 1.3% to $77.94 per barrel intraday.

In company news, Costco Wholesale ( COST ) slumped 7.5%, the biggest decline on the S&P, after growth in the retailer's fiscal Q2 net sales missed the market consensus.

Marvell Technology ( MRVL ) shares tumbled 10%, the biggest drop on the Nasdaq, after the company's fiscal Q1 earnings forecast trailed market estimates.