Job Data Quashes Rate Cut Hopes, Triggers Broad Market Selloff

A stronger-than-expected jobs report has sent shockwaves through Wall Street, extinguishing hopes for an imminent Federal Reserve rate cut.

The U.S. economy added 172,000 jobs in May, more than doubling the consensus forecast of 80,000. For investors, the news triggered a broad-based selloff as it removed any near-term reason for the Fed to pivot dovish.

The Nasdaq Composite fell 4.2%, its steepest single-day drop since April. The S&P 500 lost 2.6%, and the Dow Jones Industrial Average slid 1.4%, ending a nine-week winning streak.

Tech stocks were hit hardest. Nvidia fell 6.2%. Broadcom dropped 7.9%. Micron slid between 5% and 9% during the session. The 10-year Treasury yield climbed above 4.5%, while the 2-year yield hit 4.16%, its highest level in a year.

Bitcoin, moving in sympathy with risk assets, traded down toward the $60,000 to $62,000 range.

With a stable unemployment rate of 4.3% and payrolls doubling expectations, the labor market is too hot for the Fed to cut. The key question for investors now is whether this is a one-day tantrum or the start of a broader repricing.