US Markets Slide as Strong Jobs Report Fuels Fed Rate-Hike Fears
The New York Stock Exchange saw broad-based losses, with the Dow Jones Industrial Average falling 1.35% (695.15 points) to close at 50,866.78. The S&P 500 declined 2.64% (200.57 points) to 7,383.74, while the Nasdaq Composite dropped 4.18% (1,121.53 points) to 25,709.43, marking its steepest single-day fall since April 2025.
Market volatility surged as well, with the VIX—often used as a gauge of investor fear—jumping 39.68% to 21.51.
The sell-off followed labor market data showing that US nonfarm payrolls rose by 172,000 in May, significantly above expectations. While the unemployment rate held steady at 4.3%, in line with forecasts, prior months’ figures were also revised upward, indicating continued resilience in hiring activity.
Revisions showed March job gains rising from 185,000 to 214,000, while April’s figures were adjusted from 115,000 to 179,000.
Despite signs of stability in the labor market, persistent inflation pressures have strengthened speculation that interest rates could remain elevated or rise further by year-end. Following the report, US Treasury yields climbed, with the 10-year note moving above 4.5% and the 30-year yield surpassing 5%.
Investor sentiment was further pressured by comments from Federal Reserve officials. Cleveland Fed President Beth Hammack said the data suggested the labor market remains largely balanced, reinforcing expectations that policy easing is unlikely in the near term.
Technology stocks led the downturn, with semiconductor and AI-related firms experiencing steep losses. Broadcom dropped 7.9% after a previous 12% decline, while Marvell Technology fell 16.7% and Micron Technology lost 13.3%. Nvidia slid 6.2%, AMD declined 10.9%, and Intel dropped 11.3%.
Geopolitical tensions in the Middle East also weighed on sentiment, with analysts pointing to stalled diplomatic progress as an additional factor reducing investor risk appetite.
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