Traders work on the floor at the New York Stock Exchange in New York City, U.S., June 3, 2026.
Brendan McDermid | Reuters
The S&P 500 and Nasdaq Composite fell on Friday, bogged down by a sell-off in key chip stocks and rising Treasury yields following a much stronger-than-expected jobs report for May.
The broad market index dropped 1%, while the tech-heavy Nasdaq lost 1.6%. The Dow Jones Industrial Average traded down 151 points, or 0.3%.
Shares in Broadcom were about 3% lower after tumbling more than 12% on Thursday. Marvell Technology dropped more than 8%, while Micron Technology was down 6%.
The moves came after the Bureau of Labor Statistics reported Friday that nonfarm payrolls increased by 172,000 in May, well above the 80,000 jobs that economists polled by Dow Jones had expected to be added. The unemployment rate also held steady from April at 4.3%, in line with expectations.
Treasury yields moved higher following the report as expectations grew that the Federal Reserve could raise interest rates by the end of the year, per data from the CME FedWatch Tool. The 10-year yield jumped above 4.5%, while the 30-year yield advanced above 5%.
“It’s going to be a tough start for Kevin Warsh,” said Stephen Coltman, head of macro at 21shares. “With the inflation and employment data where they are now the debate is quickly moving on from ‘when will the Fed be able to cut’ to ‘why isn’t the Fed hiking?!’. If the Fed moves from a dovish bias to a hawkish bias that will be a difficult transition for the markets to digest, and would likely trigger a renewed bout of volatility across asset classes.”
On Thursday, the blue-chip Dow scored a fresh record close. The S&P 500 also saw gains, while the Nasdaq declined, weighed down by a rotation out of the technology sector.
“A lot of us would prefer a broadening of the market, and when we say that I think it’s no longer broadening away from Mag Seven, it’s really a broadening away from semi-cap equipment and hardware,” said Charles Kantor, senior portfolio manager at Neuberger Wealth, on CNBC’s “Closing Bell: Overtime” on Thursday afternoon. “You had a little bit of that today, but the pipeline of demand for stuff related to building out compute and data centers from now even into 2030 is a powerful force.”
The S&P 500 is down less than 1% on the week, on track for its first negative week in 10. The 30-stock Dow is poised to end the week up less than 1%, while the Nasdaq Composite is heading for a roughly 2% loss.
— CNBC’s Jeff Cox and Garrett Downs contributed to this report.
