NEW YORK, June 5, 2026, 16:02 EDT
- The Dow traded around 50,880 in after-hours, off roughly 1.3%. The S&P 500 and Nasdaq dropped more.
- Investors priced in tighter Fed policy after a May jobs report came in stronger than expected.
- Chip stocks dropped the most. Nvidia, Broadcom, and Micron were among the biggest losers.
Dow drops hard after the close Friday, pulling back from Thursday’s record as a strong U.S. jobs number sent Treasury yields up and chip stocks sold off across Wall Street. Near the close, the Dow was near 50,880, off about 1.3%. S&P 500 lost about 2.5%, Nasdaq dropped almost 4%.
The move drew attention because it followed less than a day after the blue-chip average set a record close. The Dow tracks 30 big U.S. companies and is price-weighted, so higher-priced stocks have more impact on the average than the largest companies by market cap. That makes single-stock swings matter more to the Dow compared with a market-cap weighted index like the S&P 500.
May payrolls topped forecasts. Employers put on 172,000 jobs, way over the 85,000 expected in the Reuters poll. Unemployment stuck at 4.3%. March and April numbers got revised higher by 93,000. That dents hopes for a quick rate cut from the Fed.
Peter Cardillo, chief market economist at Spartan Capital Securities, said it was “a good report” and another sign for investors that the Fed might still go for a rate hike next. Tom Porcelli, chief economist at Wells Fargo, said the data kept the “wind” behind the Fed hawks—those wanting to stay tight on policy to slow inflation. Reuters
Bond yields moved up after the numbers came out. That can hurt stocks, since bigger yields draw money into bonds and push down what investors are willing to pay for future profits, tech stocks taking most of the hit. Ronald Temple, chief market strategist at Lazard, said, “Any hopes of a Fed rate cut have effectively been eliminated.” AP News
Nasdaq led losses as growth and chip stocks sold off. The Philadelphia Semiconductor Index dropped over 8%, according to Reuters. Nvidia, Broadcom and Micron were some of the bigger chip names hit as investors pulled back from the AI trade that had powered markets up.
Lululemon shares dropped after the retailer cut its annual profit outlook, citing weaker revenue trends and saying it would need heavier seasonal markdowns. Cooper Companies gained as it posted better-than-expected quarterly profit and revenue thanks to strength in contact lenses.
Defensive stocks were in focus. Investors left high-priced growth names, checking if consumer staples, health care and other stable sectors would take in some of the selling. The Dow outperformed the Nasdaq, though that didn’t offer much comfort after the record highs set Thursday.
But the outlook isn’t straightforward. The labor market is strong and can help support earnings, but the risk is that rates and energy costs remain elevated, putting pressure on consumers and edging the Fed toward a hike. That could hurt expensive tech stocks and pull the Dow down, even with no immediate downturn in the economy.
Fed’s next official test comes up soon. The Federal Open Market Committee is set to meet June 16-17 and will release new projections then. That leaves traders less than two weeks to figure out if Friday’s selloff was just a pause after the rally or signals a broader move.
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