New York, June 5, 2026, 18:04 EDT
Wall Street’s fear gauge surged almost 40% Friday after tech stocks tumbled, dragging the Nasdaq down 4.2% and the S&P 500 off 2.6%. A strong U.S. jobs report flipped sentiment to worries over rates. The Cboe Volatility Index, or VIX, which tracks the expected S&P 500 swings based on options, jumped to 21.51. It finished Thursday at 15.40.
Jobs data didn’t move markets lower. The U.S. Bureau of Labor Statistics reported nonfarm payrolls rose 172,000 in May, with the unemployment rate steady at 4.3%. Leisure and hospitality, local government, and health care jobs increased. Financial activities lost jobs.
S&P 500’s nine-week Friday-to-Friday streak ended, according to Reuters. Stocks had been trading on expectations of stable markets and looser policy. After the jobs data, financial markets priced a 42.7% chance of a Fed rate hike in December.
Treasury yields climbed after the report, with the two-year up 10 basis points to 4.15% in early trading. Jason Pride, chief of investment strategy and research at Glenmede, said the numbers took pressure off the Fed to move quickly on jobs.
VIX gains picked up before the market closed. MarketWatch earlier had the volatility index up 22.9% at 18.92, clearing its 200-day moving average and on track for its biggest single-day jump since March 6. Cboe’s later reading showed the move grew larger into the close, not smaller.
Chip stocks took heavy hits. U.S.-listed chipmakers lost around $1.3 trillion in market cap, according to Reuters, after the PHLX chip index dropped 10.3% for its biggest one-day drop since March 2020. Broadcom ended down 7.9%, Nvidia fell about 6%, Micron tumbled 13%, and Advanced Micro Devices lost nearly 11%.
Broadcom’s cautious outlook dragged on AI stocks and weighed on the group. Jobs numbers dented bets on quick rate cuts. International Business Times said the VIX picked up for similar reasons, pointing to the tech drop, jobs strength and Fed risk.
But risks cut both ways. Ryan Detrick, chief market strategist at Carson Group, said “the dam just broke today” after the big equity move. Ohsung Kwon, chief equity strategist at Wells Fargo, said semiconductors are “way overbought” and called the market action more about positioning than any major shift in fundamentals. Softer inflation data might trigger a quick reversal on Friday, but firmer data could keep yields up and push more hedging at the Fed. Reuters
Right now, traders are watching one signal. If the VIX drops quickly to the mid-teens, it suggests the selloff was just a crowded unwind. But if the index stays stuck above 20, that points to investors still willing to pay for downside protection.
