12:31 PM EST, 02/07/2025 (MT Newswires) -- US equity indexes fell as bets in favor of the Federal Reserve extending its policy pause into March jumped following the jobs and inflation expectations data and amid media speculation that President Donald Trump plans to announce reciprocal punitive tariffs as early as Friday.

The Nasdaq Composite dropped 1.3% to 19,540.2, with the S&P 500 down 0.8% to 6,035.3 and the Dow Jones Industrial Average 0.6% lower at 44,459.7 after midday Friday. All sectors except energy fell intraday, with communication services and consumer discretionary leading the decliners intraday.

Total nonfarm payrolls rose by 143,000 in January, the Bureau of Labor Statistics reported Friday. The consensus was 175,000, according to a survey compiled by Bloomberg. December's gain was revised by 51,000 to 307,000 and adjusted upwards by 49,000 for November.

The BLS said that wildfires in Southern California and severe winter weather had "no discernible effect" on the job numbers. The unemployment rate slipped to 4% from December's 4.1%, which was the market view for January.

Meanwhile, the University of Michigan's preliminary consumer sentiment index fell to 67.8 in February from 71.1 in January, below expectations for an increase to 71.8 in a survey compiled by Bloomberg. Respondents saw one-year inflation expectations at 4.3%, up from 3.3% in January and the highest since November 2023. Five-year inflation expectations rose to 3.3%, the highest since 2008, according to data compiled by Trading Economics, from the prior month's 3.2%.

The probability of the Federal Open Market Committee extending its policy pause to March jumped to 94% by Friday afternoon from 84% a day ago, according to the CME Group's FedWatch Tool. The FOMC left the target rate unchanged in the 4.25% to 4.5% range at its policy meeting in January.

US Treasury yields advanced intraday, with the 10-year jumping 5.7 basis points to 4.5%, and the two-year rate was 6.8 basis points higher at 4.28%.

Trump told Republican lawmakers during budget discussions at the White House Thursday he plans to announce reciprocal tariffs as early as Friday, Reuters reported Friday, citing three sources familiar with the plans. The White House didn't immediately respond to requests for comment, the news report said.

In company news, Amazon.com ( AMZN ) reported higher Q4 earnings and net sales late Thursday but issued Q1 net sales guidance below analyst expectations. Shares of the online retail giant slumped 3.2%, among the steepest decliners on the Dow and the Nasdaq.

West Texas Intermediate crude oil futures rose 1% to $71.29 a barrel.