Stocks slide as Big Tech sinks and bond yields surge after a strong May jobs report

U.S. stocks declined Friday as a stronger-than-expected May jobs report—showing a gain of 172,000 positions—boosted fears the Federal Reserve may raise interest rates later this year. The S&P 500 fell 1.7%, marking its first losing week in 10 and the largest one-day drop since March, while the Nasdaq composite slumped 2.9%. Tech stocks led declines, with Nvidia down 5%, Broadcom dropping 5.7%, and Micron Technology sliding 9.4%, dragging broader indexes lower. The jobs report triggered a spike in bond yields, with the 10-year Treasury yield rising to 4.54% and the 2-year yield jumping to 4.17%. Markets now assign over a 60% chance the Fed will hike rates by year-end, eliminating expectations of cuts. Fed Chair Kevin Warsh’s first policy meeting, scheduled for June 16–17, is unlikely to change rates despite pressure from former President Donald Trump to lower borrowing costs. The strong labor data contrasts with economic strains, including inflation fueled by tariffs and surging oil prices amid the U.S.-Iran conflict. Brent crude fell 2.2% to $92.97, up from $70 before the war, while gasoline prices climbed, exacerbating inflation. The Fed’s preferred inflation measure rose 3.8% in April, the largest increase in two years, though negotiations for a ceasefire between the U.S. and Iran remain unresolved. Corporate earnings wrapped up with mixed results: Lululemon dropped 7.9% after cutting revenue and profit forecasts, while most reports beat expectations, supporting the S&P 500’s 9% year-to-date gain. Analysts warn AI-driven tech stocks may be overvalued, risking a slowdown in a market that has surged this year despite economic headwinds like tariffs and high energy costs.