Why is the US stock market down today? Dow Jones, S&P 500 and Nasdaq crash big as strong jobs report, rising Treasury yields and AI stock selloff shake Wall Street — here are ...

The US stock market fell sharply on June 5, 2024, following a stronger-than-expected May jobs report that raised concerns about Federal Reserve interest rate cuts. Employers added 172,000 jobs last month, double the 80,000 economists forecasted, while the unemployment rate remained steady at 4.3%. The data fueled speculation that the Fed may delay rate cuts, pushing the 10-year Treasury yield up from 4.47% to 4.54%. The Dow Jones Industrial Average dropped 0.79% to 51,155.19, the S&P 500 fell 1.75% to 7,451.30, and the Nasdaq Composite declined 2.95% to 26,038.96, marking the steepest losses. Tech stocks, particularly AI-focused companies, led the selloff due to their reliance on long-term earnings projections, which become less valuable in a high-rate environment. Investor sentiment shifted rapidly, with the probability of a Fed rate hike in late October rising to 51% from 34% the prior day. The stronger labor market reduces pressure on the Fed to cut rates, making bonds more attractive and dampening stock valuations. Commodities like crude oil and gold also declined, while the US Dollar Index rose slightly to 100.02. The market reaction reflects broader concerns about prolonged high borrowing costs, which could weigh on corporate profits and consumer spending. Analysts note that while strong job growth is positive for the economy, it complicates the Fed’s timeline for easing monetary policy. Traders are now recalibrating expectations, with Bitcoin briefly dipping below $60,000 before recovering to around $61,300. The selloff underscores the sensitivity of stock markets to economic data, particularly when it challenges expectations of policy shifts. With Treasury yields rising and rate-cut hopes fading, investors may face continued volatility in the coming weeks.