Key facts
- US stock market experienced its worst day since October.
- S&P 500 fell 2.6%, its biggest one-day drop since October 10.
- Nasdaq Composite slumped 4.2%.
- Tech stocks led the decline, with Nvidia down 6.2% and Meta down 5.5%.
- A strong US jobs report increased expectations that the Federal Reserve may hike interest rates.
- Bond yields rose significantly following the jobs report.
The U.S. stock market experienced its worst day since October on Friday, with a significant sell-off in technology companies dragging down the broader market. The S&P 500 declined 2.6%, its largest single-day drop since October 10, while the Nasdaq Composite slumped 4.2%. This downturn interrupted a two-month rally and marked the benchmark index's first losing week in ten. Tech stocks, which had previously powered market records, were notably weak, with Nvidia falling 6.2%, Broadcom dropping 7.9%, and Micron Technology sliding 13.3%. Meta's shares decreased by 5.5%. The market's decline was exacerbated by a surprisingly strong jobs report, which added 172,000 jobs in May, diminishing expectations for a Federal Reserve rate cut and increasing the likelihood of a rate hike by year-end. Bond yields surged in response, with the 10-year Treasury yield rising to 4.54% and the 2-year Treasury yield jumping to 4.16%. Analysts noted that the strong employment data effectively eliminated hopes for an imminent Fed rate cut. The sell-off occurred despite generally positive corporate earnings reports, with Lululemon being an exception, dropping 8.6% after trimming its revenue and profit forecasts.