Wall Street Posts Worst Day Since October After Strong May Jobs Report
Wall Street had its worst day since October on Friday after a strong May jobs report pushed bond yields higher and renewed concern that the Federal Reserve may keep interest rates elevated.
The U.S. economy added 172,000 jobs in May, far above expectations, while unemployment remained unchanged at 4.3%, according to the Bureau of Labor Statistics. Job gains were reported in leisure and hospitality, local government and health care, while financial activities employment declined.
The market reaction was sharp. The S&P 500 fell 2.6%, the Nasdaq dropped 4.2%, and the Dow Jones Industrial Average lost about 695 points, according to AP market data.
The selloff shows how investors are interpreting economic strength through the lens of interest rates. A hotter job market can mean consumers still have income to spend, but it can also make inflation harder to cool. That reduces the odds of rate cuts and can increase pressure for the Fed to keep borrowing costs high.
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Tech stocks were hit especially hard. AP reported Nvidia fell 6.2%, Broadcom dropped 7.9%, Micron slid 13.3%, and Meta lost 5.5%.
Social and market reaction centered on the idea that good economic news became bad news for stocks. Schwab described the move as a “good news is bad news” reaction driven by Treasuries, while Reuters reported that rate-hike expectations rose after the jobs data.
For the broader economy, the report cuts both ways. It suggests employers are still hiring, lowering immediate recession concerns. But it also means households and businesses may face higher borrowing costs for longer.
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