NEW YORK, June 5, 2026, 16:01 EDT
Stocks fell sharply Friday, pulled down by weakness in chipmakers. A strong jobs report pushed investors to bet the Fed will hang on to higher rates. The Dow Jones Industrial Average sank 439.25 points, or 0.85%, closing at 51,122.68. The S&P 500 dropped 138.07 points, or 1.82%, to 7,446.24. The Nasdaq Composite was down 823.61 points, or 3.07%, at 26,007.35.
Jobs numbers shook trading. The Labor Department said nonfarm payrolls were up by 172,000 in May while jobless rate stayed at 4.3%. Gains came from leisure and hospitality, local government, and health care. Financial activities lost jobs.
Traders had expected the Fed to stay put, so the move landed hard. After the jobs data, rate futures put the odds of a December hike at 68.4%, up from 52% late Thursday. Prices still lean toward a hold in June. “Barnburner of a print,” Janus Henderson Investors portfolio manager Bradford Smith said about the payrolls numbers. Reuters
Bond yields climbed again. Treasury yields are what investors earn from holding U.S. government bonds, and higher yields usually weigh on growth stocks since their future earnings lose value. The 10-year yield reached 4.54%. The 2-year, which traders watch for Fed expectations, was at 4.16%. “Any hopes of a Fed rate cut” are off the table, Lazard chief market strategist Ronald Temple said. AP News
Chip shares led losses after early selling picked up steam. Nvidia, Broadcom and Micron dropped, with traders saying the AI trade had probably gotten too hot. The Philadelphia semiconductor index lost 8.1%, marking its steepest fall since the “Liberation Day” tariff drop, Reuters reported. Reuters
Stocks saw mixed action in the previous session. The Dow ended at a record Thursday and the S&P 500 added ground, while the Nasdaq dropped after disappointing Broadcom results pressured chip names. Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest, said there are still questions about whether chip stock valuations are “legitimate.” Reuters
Lululemon stock fell after the retailer lowered its annual profit guidance. Cooper Companies moved higher after reporting stronger-than-expected quarterly earnings. Bitcoin continued to slide, weighing on crypto-linked names and sending more pressure into stocks away from the big tech sector.
Oil drew attention, but didn’t set the tone. Brent crude gave up 2%, closing at $93.09 a barrel. Still, crude was set for a weekly gain as optimism faded for a quick fix in Middle East tensions. “A strong economy sits right next to new inflation risk from the Gulf,” Gary Schlossberg, market strategist at Wells Fargo Investment Institute, said. Reuters
Bears still see risks. Rising energy prices may keep inflation up, even with solid jobs data, so the Fed could stay cautious. If earnings also fall short, the blow could land on the market’s expensive end—chips, AI software, and other stocks priced on future profits.
Cooler inflation, falling oil, or softer data could pull yields back and take some pressure off stocks, but those signs remain scarce. By Friday’s close, traders had settled on one thing: another firm jobs report did nothing for the rate-cut hopes.
