Dow drops 300 points as a strong jobs report brings rate hike fears by Tom Huddleston, Jr. @FortuneMagazine March 6, 2015, 3:10 PM EST E-mail Tweet Facebook Google Plus Linkedin Share icons A strong jobs report is supposed to be good news, but investors did not appear to get that memo Friday, as U.S. stocks suffered a broad sell-off after the Labor Department said the economy added a solid 295,000 new jobs in February. The government data exceeded expectations and drove the nation’s unemployment rate down to 5.5%, which triggered investors’ concerns that the improving economy could result in the Federal Reserve raising interest rates sooner than the market had anticipated. The Dow Jones industrial average fell more than 300 points in afternoon trading Friday, but closed just above that level, and finished the day down 1.5%. It had already been an up-and-down week for the blue-chip index, which recorded its latest record close on Monday before the market began a steady decline throughout the week, leaving the Dow off by roughly 1.8% for the week. Meanwhile, the Nasdaq composite continued its retreat from 5,000 points — a mark the index crossed earlier in the week for the first time since the dot-com bubble burst in 2000. The tech-heavy index tumbled more than 50 points, or 1%, on Friday and finished the week in the red. The S&P 500, which also reached record highs earlier in the week, dropped about 1.4% on Friday to end the week at a loss. The Fed has maintained in the past that it will take a “patient” approach to its eventual interest rate hikes, but Friday’s strong employment numbers forced many investors to adjust their forecasts for when such an increase will take place. Fortune’s Chris Matthews noted Friday that the February jobs report leaves the Fed with a difficult decision to make as 5.5% unemployment essentially meets the Fed’s standards for full employment, which would mean an interest rate hike would be imminent. However, the Fed will also need to consider whether it should give the market more time to produce jobs for the long-term unemployed who have fallen out of the workforce. The U.S. market also received a shake-up on Friday morning with the announcement that Apple AAPL , the country’s largest company by market value, will be replacing AT&T T on the Dow index.