Wall Street on Friday erased all the gains made in the fledgling year, after a hotter-than-expected jobs report led to analysts and traders significantly dialing back their odds of further Federal Reserve rate cuts.

The dollar rallied, while U.S. stocks fell sharply on Friday after data showed the U.S. economy created far more jobs in December than expected, reinforcing the belief among investors that U.S. interest rates may not fall much this year.

When the December nonfarm payrolls report hit the tape, there was no question which way stocks would go at Friday's opening bell.

The Cboe Volatility Index (VIX) - widely seen as Wall Street's fear and volatility gauge - soared about 9% on Friday to a three-week-high, after the latest job market update led to a big recalibration in Federal Reserve rate cut expectations.

Wall Street's main indexes opened lower on Friday after a better-than-expected jobs report fanned expectations that the Federal Reserve will take a measured approach to monetary policy easing