New York, June 5, 2026, 10:11 EDT
Stocks were mixed at the open Friday. The S&P 500 and Nasdaq slid after May jobs data came in hotter than forecast, which put rate-hike jitters back in play and weighed on chip stocks tied to artificial intelligence. The Dow moved up at the open, but large growth stocks took most of the selling.
May’s jobs report is cutting into the way investors had been betting on a looser Fed. The Labor Department’s Bureau of Labor Statistics said nonfarm payrolls grew by 172,000 last month, with the unemployment rate flat at 4.3%.
The gain beat the 85,000 rise economists polled by Reuters had expected. March and April payroll figures got revised higher by a total of 93,000. Traders in U.S. interest-rate futures now see a 65% chance of December tightening, up from 48% before the data, based on LSEG estimates cited by Reuters.
S&P 500 dropped 0.6% to 7,539.32 just after the open, with the Nasdaq Composite down 1.1% at 26,550.03. The Dow stayed barely positive at 51,566.60, according to Investing.com. Reuters said the S&P lost 47 points and the Nasdaq fell 294.4 points out of the gate, while the Dow picked up 48.1 points.
Jobs growth in May was spread across sectors. Leisure and hospitality picked up 70,000 jobs, while local government added 55,000 and health care gained 35,000, according to the BLS. Financial activities shed 22,000 jobs. Average hourly earnings moved up 0.3% on the month and rose 3.4% from last year.
Bonds sold off. The two-year Treasury yield, which tracks Fed expectations, jumped 10 basis points to 4.15%. The 10-year yield rose 6 basis points to 4.54%. “The Fed’s calculus is unchanged,” said Jason Pride, chief of investment strategy and research at Glenmede. He said inflation is still the main restraint on rate cuts. Reuters
Chip shares weighed on the market. Broadcom slid another 4% around 10 a.m. ET, following Thursday’s drop. Advanced Micro Devices, Intel and Micron each lost 6% to 7%, according to market data.
Broadcom posted a 48% jump in second-quarter revenue to $22.187 billion, numbers that don’t look soft at first glance. CEO Hock Tan said “The momentum continues” as the company put its third-quarter forecast for AI semiconductor revenue — including chips and networking equipment for artificial-intelligence uses — at $16 billion. Broadcom Inc.
Broadcom’s quarterly revenue fell short of forecasts, Reuters said, and investors didn’t like that the company stuck with its $100 billion AI revenue goal for fiscal 2027 instead of raising it. Matt Britzman at Hargreaves Lansdown called it “a classic case” of a market hoping for perfection. Reuters
Some strategists said the jobs numbers pose more of a challenge for the Fed than for growth itself. Lindsay Rosner at Goldman Sachs Asset Management called the current stance “not move: HOLD.” Ellen Zentner at Morgan Stanley Wealth Management said the bigger jobs print is likely to keep markets “focused on inflation pressures.” Kiplinger
The trade is still up in the air. If payrolls cool off, or if inflation slows and bond yields drop, the tech slide from Friday could reverse. On the other hand, if the numbers push the Fed to shift from wait-and-see to more hawkish, Stephen Coltman at 21Shares said that would be a “difficult transition” for markets. Kiplinger
