TLDR
- The Nasdaq fell 2.1%, the S&P 500 fell 1.1%, and the Dow Jones lost 140 points on Friday.
- The May jobs report showed 172,000 jobs added, nearly double expectations of 88,000 jobs
- The strong jobs data pushed interest rate hike odds to 68.3%, effectively ruling out cuts in the near term
- Broadcom’s earnings sell-off sent chip stocks and broader AI trading lower
- The S&P 500 is at risk of snapping a 9-week winning streak, the longest since 1985.
US stocks fell sharply on Friday after a stronger-than-expected jobs report pushed interest rate hike bets higher, and fresh concerns about spending on artificial intelligence weighed on technology stocks.
The Nasdaq index fell by 2.1%. The Standard & Poor’s 500 index fell 1.1%. The Dow Jones Industrial Average lost about 140 points, or 0.3%.
The sell-off was driven by two separate forces hitting the markets at the same time.
Jobs report
the May non-farm payrolls report The report showed that American employers added 172,000 jobs last month. Economists had expected about 88,000. The unemployment rate held steady at 4.3%.
Stronger than expected data changed expectations about Federal Reserve policy. Traders moved quickly to price in at least one rate hike by the end of the year.
The odds of raising the interest rate jumped to 68.3%, compared to 50.4% the previous day. This effectively rules out interest rate cuts for now.
Eric Winograd, chief U.S. economist at AllianceBernstein, said the data shows the economy is still holding up. “That’s enough to keep the Fed on its toes,” he wrote.
This comes as President Trump continues to publicly push for lower interest rates. Kevin Warsh, a Trump appointee, recently took over as Chairman of the Federal Reserve.
AI and chip stocks had another hit
Broadcom It actually fell sharply on Thursday after its earnings report. On Friday, stocks fell again.
The broader chip sector followed. Investors have become more cautious about AI-related spending, and Broadcom’s results have heightened those concerns.
Technology stocks have risen strongly in recent weeks, helping lift major indexes. This momentum has now stopped.
The Nasdaq has been one of the biggest beneficiaries of AI trading. It is now one of the worst affected areas with sentiment changing.
The winning streak is on the line
the Standard & Poor’s 500 He entered Friday looking for gains for the 10th straight week. This would have been the longest winning streak since 1985.
This line is now in danger of ending.
The index fell as several headwinds – concerns about interest rates, weak technology, and geopolitical uncertainty – converged.
Reports of faltering ceasefire negotiations between the United States and Iran added to the uneasy mood on Wall Street. President Trump said the talks are in the “final” stages, but there is still uncertainty.
Stock futures were already pointing lower before the jobs data drop, with Nasdaq 100 futures leading the declines during the morning session.
The combination of a hot labor market, tight interest rate expectations and volatile AI trading left few safe places in stocks on Friday.
🚨 Our May Stock Picks are now available!
A new month means new opportunities. Our analysts just released their top stock picks for May, highlighting companies with strong momentum that rank highly in our KO Score algorithm. We also now share trading ideas for both long and short term investors, giving you more ways to discover potential market opportunities.
Sign up for Knockout Stocks today And get a 50% discount to open the full list and see the discounted stocks.
Use coupon code Special50 To get your exclusive discount!
