May payrolls surged to 172K jobs, exceeding forecasts and lifting rate hike odds to nearly 50% for September.
US equities extended losses after May non-farm payrolls rose by 172K, well above the 85K estimate. Revisions added 72K jobs to prior months, reinforcing a robust labor market. The S&P 500 fell 1.1%, while the Nasdaq dropped 1.9%, led by declines in tech and semiconductor stocks.
Earlier expectations had centered on a cooling jobs market, but the report, combined with strong JOLTS data, signaled accelerating hiring. US 2-year Treasury yields climbed 8.4 bps to 4.13%, reflecting heightened Fed tightening bets. The Fed enters its blackout period tonight ahead of the next decision.
Tech stocks bore the brunt of the selloff, with Broadcom’s earnings weighing on sentiment. Chipmakers and software ETFs underperformed, while defensive staples like Coca-Cola and Costco gained ground.