By Sinéad Carew, Devik Jain and Anisha Sircar

(Reuters) - Wall Street's three major stock indexes ended lower on Friday after a solid jobs report ate in to hopes for a pause in the Federal Reserve's aggressive policy-tightening which is needed to cool decades-high inflation.

The technology-heavy Nasdaq led the declines, falling 2.5% as shares of market heavyweights Apple Inc (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) Inc were the biggest drags on the market.

Earlier, the Labor Department's closely watched report showed nonfarm payrolls rose by 390,000 jobs last month and wages grew, while the unemployment rate held steady at 3.6% - all signs of a tight labor market.

Economists polled by Reuters had forecast that nonfarm payrolls would rise by 325,000 jobs.

While the jobs report was reassuring for the current state of the economy, investors focused primarily on its potential influence on central bank policy.

"The market is trying to funnel its response through what the Fed may or may not do," said Nela Richardson, chief economist at ADP, who expects the market to continue to seesaw as a result of uncertainty around interest rates and inflation.

Shawn Snyder, head of investment strategy at Citi Personal Wealth Management, saw the solid report as a double-edged sword.

"It's telling us the economy is in fairly good shape which is good news but when viewed in the context of what it means for the Federal Reserve and tightening monetary policy it likely makes them more confident they can continue to tighten," he said. "That comes through as a bit of a negative for investors because they're hoping for the Fed to pause later this year."

Money markets are fully pricing in 50 basis-point rate hikes by the Fed in June and July.

While the May report's slower-than-expected increase in hourly earnings looked like good news for inflation, Snyder cited rising oil prices as an offsetting factor.

The Dow Jones Industrial Average fell 348.58 points, or 1.05%, to 32,899.7, the S&P 500 lost 68.28 points, or 1.63%, to 4,108.54 and the Nasdaq Composite dropped 304.16 points, or 2.47%, to 12,012.73.

Among the S&P's 11 major sectors consumer discretionary was the weakest with a 2.9% drop followed by technology's 2.5% drop. The energy index, up 1.4%, was the only gainer of the pack, as oil prices rose. [O/R]

For the week, the S&P 500 fell 1.2% while the Nasdaq declined 0.98% and the Dow lost 0.94% after all three indexes had risen sharply the week before.

Volatility has gripped Wall Street in recent weeks as investors debated whether markets had hit a bottom against the backdrop of some hawkish comments from Fed officials and data suggesting that inflation may have peaked.

"For right now, the economy looks OK. And the labor market as a signal of the real economy on Main Street looks incredibly solid," said ADP's Richardson, adding she sees inflation as "a threat to that outlook" even if it may have peaked.

"The peak is less relevant than the staying power of inflation and elevated rates," she said. "That's why wages in this report were so material. While wage growth may not drive up inflation past the peak, it could play a strong role in keeping inflation around these higher levels much longer than anybody wants or anticipates."

IPhone maker Apple finished down 3.9% after a bearish brokerage outlook and a report that EU countries and lawmakers would agree next week on a common charging port for mobile devices and headphones - a proposal Apple has criticized.

Tesla shares sank 9.2% after CEO Elon Musk, in an email to executives seen by Reuters, said he has a "super bad feeling" about the economy and needs to cut about 10% of jobs at the electric car maker.

Meanwhile, after markets closed, FTSE Russell was due to reveal an early list of index members as a part of its annual reconstitution aimed at reflecting shifts in the broader market.

Declining issues outnumbered advancing ones on the NYSE by a 2.68-to-1 ratio; on Nasdaq, a 1.79-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week high and 29 new lows; the Nasdaq Composite recorded 32 new highs and 88 new lows.

On U.S. exchanges 9.42 billion shares changed hands on Friday compared with the 12.89 billion average for the last 20 sessions.