North American markets ended a volatile week with sharp losses led by the Dow Jones index losing 666 points, or 2.5 per cent, in its biggest decline in two years.

The Dow Jones Industrial Average closed down at 25,520.96 points, while the S&P 500 lost 2.1 per cent to 2,762.13 points.

Both benchmark indexes saw the worst week of losses since January 2016.

The tech-heavy Nasdaq Composite dropped two per cent to 7,240.95 on Friday — marking its worst week of losses since February 2016.

The decline in U.S. stocks deepened in the afternoon, following jobs data that showed the strongest annual wage growth since 2009, raising the prospect of higher inflation and more interest rate hikes.

Nonfarm payrolls jumped by 200,000 jobs in January after rising 160,000 in December, while the unemployment rate remained at a 17-year low of 4.1 per cent.

But Scotiabank economist Derek Holt said in his morning note that he was cautious about the acceleration in wage growth for a few ​reasons.

"Wages may have accelerated… but incomes in aggregate were dented by working fewer hours," he said.

Robert Kavcic of BMO Capital Markets said the "relentless" rise in bond yields is probably not helping markets at this point.

"The 10-year Treasury is pushing 2.8 per cent for the first time since early 2014, and the two-year is nearing 2.2 per cent for the first time since the Fed eased aggressively during the financial crisis," he said.

As interest rates rise, the value of existing bonds falls and borrowing to invest becomes more expensive.

Earnings impact

Weak earnings from several large companies like Exxon Mobil, Chevron and Google's parent company, Alphabet, also weighed on the benchmark indexes.

Index heavyweight Apple's shares were also down 4.3 per cent after its earnings on Thursday showed that the tech giant sold 77.3 million iPhones in the last quarter, below the 80 million expected by analysts.

The Canadian dollar, meanwhile, traded at 80.78 US cents, down from 81.38 US cents on Thursday.

The greenback was stronger against most major currencies on the strong jobs data.

Canadian market

Falling oil prices and a continuing decline in the marijuana sector also contributed to big losses on the Canadian market.

The S&P/TSX Composite lost 255 points, or 1.6 per cent, to 15,606.03 points, marking its worst decline in nearly five months.

The market lost some four per cent this week, which is its worst week since January 2016.

The energy and materials sectors were among the hardest hit, as crude oil and gold prices fell.

Benchmark U.S. crude fell 35 cents to $65.45 US a barrel in New York, while gold was down $10.60 to $1,337.30 an ounce.

Shares of Imperial Oil finished down 4.3 per cent after its fourth-quarter earnings fell short of market expectations.

Weed prices

The healthcare sector was the biggest loser on the index as marijuana stocks continued to lose value.

Analysts said cannabis producers will continue to see more volatility in the weeks ahead on issues such as oversupply in stock and falling prices.

A government web survey on Friday showed that Canadian marijuana costs $6.85 a gram after suggesting earlier that weed prices have been falling in recent years as illegal producers boosted production.

Shares of the country's biggest marijuana producer Canopy Growth fell 12.5 per cent on Friday.