Stock Markets Decline Midday as Rising Treasury Yields Follow Strong Employment Data

Key Points

• May nonfarm payroll growth increased by 172,000, surpassing economists’ forecasts.

• Traders are now fully anticipating a quarter-point interest rate hike by the Federal Reserve by the end of 2026.

• SpaceX’s upcoming IPO is valued at $1.75 trillion but won’t qualify for S&P 500 inclusion until at least June 2027.

In a surprising market reaction, the Nasdaq Composite dropped nearly 3% as of 1:18 p.m. ET on Friday, following a strong jobs report showing 172,000 new jobs added in May. This growth was more than double what analysts anticipated, yet it raised concerns over potential interest rate hikes. The unemployment rate remained steady at 4.3%, leading traders to fully price in a rate increase by the end of 2026.

The technology sector was notably impacted, with major stocks like Nvidia and Broadcom falling around 5%, and Micron Technology and AMD losing over 9%, erasing over $500 billion in market capitalization collectively. In contrast, defensive sectors such as consumer staples and healthcare showed gains, indicating a shift in investor sentiment amidst the uncertainty over rising interest rates.