Expectations rise for Fed rate hikes after strong jobs report

Expectations for Fed rate hikes in 2016 rose Friday after a jobs report that came in far ahead of Wall Street expectations.

Fed funds futures indicated a 52 percent chance of a rate hike in March, according to the CME Group's FedWatch site.

After the turmoil in China's markets earlier this week, those expectations had dropped into the low-40s range, and futures were instead indicating the first better-than-average chance of the next rate hike in June.

RBS said its interpretation of overnight index swaps suggested the market was now pricing in one rate hike and a 90 percent chance of a second hike this year. There had only been a 70 percent expectation for a second hike as of Thursday.

Bank stocks like JPMorgan and Citigroup, which have suffered this week on fears that interest rates would not rise much this year, rallied sharply in pre-market trading.