US stocks tumbled after a much hotter-than-expected jobs report sent yields spiking as it likely means the Federal Reserve will halt its rate-cutting campaign.

U.S. payrolls grew by 256,000 in December, while economists polled by Dow Jones expect to see an increase of 155,000. The unemployment rate, which was projected to remain at 4.2%, fell to 4.1% during the month. The yield on the 10-year Treasury note spiked to highest level since late 2023 after the report.

Traders give 97% odds the Fed stands pat on rates at its meeting later this month and now believe the central bank will hold rates where they are at the March meeting as well, based on fed funds futures trading. Odds of a March cut fell to around 25% following the data, down from 41% odds a day earlier, according to the CME Fedwatch tool. The Fed cut its benchmark rate by a quarter point last month.

“Good news for the economy but not for the markets, at least for now,” said Scott Wren, Wells Fargo Investment Institute senior global market strategist. “However, this unexpected gain relative to the consensus projection does not change our view that the labor market is likely to decelerate further in coming quarters.”