Data showed U.S. job growth accelerated sharply in August while the unemployment rate held steady at 4.1%, pointing to a still stable labor market.
Traders added to bets that the Federal Reserve would hike interest rates later this month, with short-term interest-rate futures prices now implying about a 65% chance of a hike, compared with 55% before the jobs report.
"It just reaffirms this idea that the U.S. economy, despite some concerns, is still in a very good position," said Mike Archibald, portfolio manager at AGF Investments.
"It will be very important in the next couple of weeks to see what happens with the data and how that evolves with respect to the expectations for market participants."
Meanwhile, Canada's economy lost 41,700 jobs in August, a sharp slowdown from unusually strong summer hiring.
The Bank of Canada held interest rates steady this week, but Governor Tiff Macklem said policymakers were prepared to hike multiple times if inflation remained too high.
On TSX, the materials sector (.GSPTTMT) led losses, down 2.1% as miners lost ground, tracking declines in gold and silver prices.
Discovery Mining (DSV.TO) and SSR Mining (SSRM.TO) lost 3.5% each, while Barrick Mining (ABX.TO) was down 2%.
Energy stocks (.SPTTEN) fell 1.6%, tracking a dip in oil prices.
Renewed strikes in the Middle East pushed up oil prices and bond yields earlier this week, creating an uncertain backdrop for risk assets.
If losses hold, the TSX could erase all gains so far this week.
Among stocks, powersports vehicle maker BRP (DOO.TO) gained 4.3% after National Bank of Canada upgraded the stock to "outperform" from "sector perform".
Canada's main stock index opened lower on Friday after stronger-than-expected U.S. jobs data prompted investors to increase bets on an interest-rate hike by the Federal Reserve this month.
The S&P/TSX Composite Index (.GSPTSE) fell 0.4% to 36,494.42 at 09:44 a.m. ET.
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