Despite an encouraging report that revealed the U.S. economy added more jobs than expected last month, U.S. stocks closed sharply lower Friday, with the Dow Jones Industrial Average plunging nearly 300 points, after the strong report turned up pressure on the Federal Reserve to increase interest rates sooner than expected.

The jobs report showed U.S. employers added 295,000 jobs in February, well above expectations of 240,000. The unemployment rate fell to 5.5 percent in February from 5.7 percent in January.

The Dow Jones Industrial Average, which measures the share prices of 30 large industrial companies, plunged 278.94 points, or 1.54 percent, to close at 17,856.78. The S&P 500 stock index lost 29.78 points, or 1.42 percent, to end at 2,071.26. The Nasdaq composite fell 55.44 points, or 1.11 percent, to finish at 4,927.37.

Separately, S&P Dow Jones Indices announced Friday that Apple Inc., the highest valued company in the world, is expected to join the Dow after the close of trading on March 18, replacing AT&T Inc., which was added to the blue-chip index in 1916. Shares of the iPhone maker rose 0.15 percent Friday to close at $126.60, while the wireless services provider fell more than 1 percent to end the session at $33.48. 

The U.S. stock market was weighed down Friday, mostly due to losses in sectors that would be negatively impacted due to the higher rates, such as the utilities sector, which lost more than 3 percent in the S&P 500, and sharp losses in the Real Estate Investment Trust (REIT). But sectors that will benefit from higher rates gained in early trading Friday, including the financial sector, as well as consumer credit and insurance stocks. “Any sectors that benefit from higher interest rates are gaining today because once interest rates are higher, they’ll make more money,” said Mark Spellman, a portfolio manager at Alpine Funds.

However, the odds of a Federal Reserve rate hike crept up again Friday as a sooner rather than later scenario. “The likelihood of a June or September rate hike is higher today after this report for sure,” said Spellman.

Job creation jumped in February despite harsh winter weather, and the U.S. has added at least 200,000 jobs per month for 12 consecutive months, a feat not seen in 20 years. “Anything solidly above 200,000 is great news for the state of the labor market and the economy more broadly because it means we’re still continuing to quickly build our workforce,” said Tara Sinclair, chief economist at Indeed.

However, experts still are somewhat discouraged following Friday’s jobs report as the drop in the unemployment rate to 5.5 percent was largely a result of people leaving the labor force. The labor force participation rate, the percentage of workers who are employed or looking for a job, fell slightly last month, declining to 62.8 percent from 62.9 percent the previous month. The participation rate continues to hover at its lowest level since the 1970s.

“What we have in the U.S. is a large number of workers that after being laid off are either settling or just dropping out,” said Gary Chaison, professor of industrial relations at Clark University.

Looking ahead, market professionals are turning their attention to the Federal Reserve’s two-day policy meeting on March 17-18 for hints as to when the central bank plans to increase interest rates, which most economists expect to happen in mid-2015.