Wall Street Gets a Reality Check: Tech Stocks Tumble After Hot Jobs Data
MarketDash
A surprisingly strong May jobs report has markets repricing rate hike odds, sending the Nasdaq 100 down over 3% and triggering a broad selloff in tech, crypto, and commodities.
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Friday was not a good day for risk assets. U.S. tech stocks took a beating after a jobs report that was way too hot for comfort, reigniting fears that the Federal Reserve might actually raise interest rates again. The Nasdaq 100 dropped 3.2% by midday, putting it on track for its worst daily decline since October 2025. The broader S&P 500 fell 1.8%, while the Dow, with its lighter tech exposure, slipped just 0.8%.
The culprit? The economy added a robust 172,000 nonfarm payrolls in May, crushing expectations for 85,000. And it wasn't just May — payroll gains for March and April were revised higher by a combined 93,000 jobs. The unemployment rate held steady at 4.3%. Combine that with April's hot inflation reading (CPI at 3.8% year over year, the highest since May 2023), and you've got a recipe for rate hike speculation.
Odds of a quarter-point rate hike by year-end surged to near certainty, while money markets priced in a roughly 60% chance of an additional hike in 2027. Treasury yields shot higher, with the 2-year yield jumping more than 10 basis points to 4.15% and the 10-year yield rising to 4.54%. The dollar strengthened broadly, with the trade-weighted U.S. Dollar Index gaining nearly 1%.
High-growth stocks, especially in tech and AI, bore the brunt of the selloff. Shares of Micron Technology Inc. (MU) sank more than 10%, while Broadcom Inc. (AVGO) fell over 6%, extending Thursday's 12% decline. The pain wasn't limited to large caps — small caps also struggled, with the Russell 2000 sliding about 2.6%.
The Volatility Index, or VIX — Wall Street's fear gauge — jumped 21%, reflecting the sudden shift in sentiment.
Commodities weren't spared. Gold dropped 3.1%, and silver plunged nearly 7%. The cryptocurrency selloff intensified, with Bitcoin falling 4% to $61,000, putting it on pace for a sixth consecutive losing session. Ethereum tumbled nearly 10%, hitting its lowest level since April 2025. Bitcoin has now fallen 17% this week, on track for its worst weekly performance since November 2022, when the collapse of FTX triggered a broad selloff across digital assets.
The carnage was sharpest at the industry level. The Invesco WilderHill Clean Energy ETF (PBW) cratered more than 9% as solar and renewable names sold off on the overhang of accelerating federal tax-credit phaseouts compounded by the jump in yields. The VanEck Gold Miners ETF (GDX) sank roughly 7% as bullion retreated.
Enphase Energy Inc. (ENPH) led the Russell 1000 lower, tumbling about 15% at the heart of the clean-energy rout tied to the threatened rollback of solar tax credits. Sector peer First Solar Inc. (FSLR) slid roughly 11%.
Lululemon Athletica Inc. (LULU) tumbled about 11% after cutting its full-year outlook late Thursday. The athleisure retailer lowered fiscal 2026 EPS guidance to $10.95-$11.15 from $12.10-$12.30 and trimmed its sales forecast to $11 billion-$11.15 billion, with interim CEO Meghan Frank citing negative media commentary and product launches that failed to land.
The defensive bid showed up at the top of the leaderboard. FedEx Freight Holding Company Inc. (FDXF) jumped about 8%, extending the strong debut of the less-than-truckload carrier spun off from FedEx on June 1 and freshly added to the S&P 500, as investors continued to assign standalone LTL operators a premium. The Cooper Companies Inc. (COO) rallied roughly 7% after its fiscal second-quarter report late Thursday, with revenue up 8% to $1.082 billion and non-GAAP EPS of $1.21, up 26% year over year and ahead of estimates. Chipotle Mexican Grill Inc. (CMG) climbed about 5% after JPMorgan upgraded the burrito chain to Overweight from Neutral with a $35 price target on valuation.
