The New York Stock Exchange closed the final trading day of the week with sharp declines as better-than-expected US employment data fueled expectations that the Fed might adopt a more hawkish stance on monetary policy.
The Dow fell 1.35%, or 695.15 points, to finish at 50,866.78.
The S&P 500 lost 2.64%, or 200.57 points, to close at 7,383.74, while the Nasdaq went down sharply by 4.18%, or 1,121.53 points, to 25,709.43; the tech-heavy index recorded its sharpest daily decline since April 2025.
The Volatility Index (VIX), often referred to as the market’s “fear index,” jumped 39.68% to 21.51.
Stock markets followed a negative trend as US employment data weakened expectations that the Fed might ease monetary policy in the short term, coupled with heavy selling pressure on chip stocks.
According to data from the US Department of Labor, nonfarm payrolls in the country increased by 172,000 in May, significantly exceeding market expectations.
The unemployment rate, however, remained steady at 4.3%, in line with expectations.
Data on non-farm payrolls for previous months was also revised upward; the employment increase reported as 185,000 in March was revised to 214,000, while the increase reported as 115,000 in April was revised to 179,000.
While the labor market is not showing broad-based strength, it has maintained its resilience; the inflation remains at high levels in the country and expectations of the Fed raising interest rates by year-end have strengthened.
Following the employment data, bond yields rose; with the US 10-year Treasury yield surpassing 4.5% and the 30-year Treasury yield exceeding 5%.
As Fed officials’ statements were closely watched, Cleveland Fed President Beth Hammack noted that the employment data confirmed the labor market is largely in balance.
The deepening sell-off in chip stocks also contributed to the negative trend in the markets. Broadcom shares, which lost over 12% in value on Thursday, fell by 7.9% on Friday, while Marvell Technology shares dropped by 16.7% and Micron Technology shares fell by 13.3%.
Nvidia shares fell by 6.2%, Advanced Micro Devices (AMD) shares by 10.9%, and Intel shares by 11.3%.
On the geopolitical front, as news regarding tensions in the Middle East continued to unfold, analysts noted that the lack of concrete progress in diplomatic efforts to end the war was among the factors dampening investor risk appetite.
European markets
European stocks saw mostly negative figures, with the pan-European Stoxx Europe 600 index was down .29% to close at 622.66 points.
In national markets, the UK’s FTSE 100 posted a slight increase of 0.07% to 10,368.05, while Germany’s DAX 40 dropped 0.75% to 24,759.05 points.
France’s CAC 40 fell 0.32% to 8,218.24, Italy’s FTSE MIB 30 went down 0.56% to 49,893.05, while Spain’s IBEX 35 was up 0.38% to end at 18,344.90.
