Markets Tumble as Strong Jobs Data Fuels Rate Hike Fears, AI Stocks Drag Wall Street Lower
The S&P 500 fell 2.64%, into the red for the week and snapped a nine-week winning streak. The tech-heavy Nasdaq Composite fell 4.18%, its worst day since April 2025.
The economy added 172,000 jobs in May according to data released Friday from the Bureau of Labor Statistics. The strong job gains come after recent data showed inflation was heating up because of the oil spike from the war with Iran. Though strong job gains are good news for the economy, according to the markets it could mean higher interest rates for longer.
Bitcoin tumbled more than 5% and dipped below $60,000, hitting its lowest level since October 2024. The cryptocurrency dropped more than 17% this week after key industry company Strategy disclosed it sold some bitcoin for the first time since 2022. Bitcoin is down more than 50% since hitting a record high in October.
This week Broadcom (AVGO) reported weaker-than-expected guidance for chip revenue in the third quarter. That sent shares down 12.59% Thursday and 7.92% Friday, highlighting the sensitive sentiment around AI. Tech stocks extended losses in the afternoon after Meta (META) dropped 5.5% on reports it is seeking to raise equity to fund its AI buildout. Gold prices also dropped more than 3.5%, effectively erasing gains for this year. Higher interest rates can make assets like gold that don?t pay income less appealing.
Treasury yields, which rise when bond prices fall, jumped higher. The 10-year yield, which influences the mortgage rates, rose to 4.54%. Higher Treasury yields can put pressure on stocks.
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