May’s jobs report exceeded forecasts, fueling fears of prolonged high interest rates and triggering a broad market sell-off.
The S&P 500 shed $1.4 trillion in market value after May’s jobs report showed employers added 172,000 positions, nearly double expectations. The stronger-than-anticipated hiring and steady 4.3% unemployment rate dashed hopes for near-term rate cuts, with traders now pricing in potential hikes extending into 2027.
Economists had forecast roughly 90,000 new jobs, making the print one of the strongest in 18 months. Earlier labor market data, including the JOLTS report, had already signaled resilience, reinforcing the shift in sentiment. The sell-off marked the index’s steepest one-day decline since October 2025.
Additional pressure came from Meta’s planned multi-billion-dollar stock offering and looming IPOs from SpaceX and Anthropic, raising concerns about equity supply. AI stocks, already near record highs, faced particular strain as investors reassessed valuations amid tighter monetary policy expectations.