Payrolls surged 172,000 in May, exceeding forecasts and raising Fed rate-hike odds to 70% for December.
The S&P 500 fell 1.6% to 7,463.24 at midday, while the Nasdaq Composite slid 2.65% to 26,122.36 and the Dow Jones Industrial Average slipped 0.74% to 51,182.31. The sell-off followed a stronger-than-expected May jobs report, which showed 172,000 payrolls added versus a consensus estimate of 80,000.
The unemployment rate held steady at 4.3%, reinforcing labor-market resilience. Economists now see a 70% chance of a Federal Reserve rate hike in December, up from prior expectations. Tech and chip stocks led declines, with NVDA, AMD, and MU all dropping on valuation concerns.
Markets reacted negatively as higher interest rates could pressure corporate growth and consumer demand, signaling potential headwinds for equities.