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1h ago

Strong May Jobs and Broadcom Warning Trigger Sharp Market Sell-Off

A surprise 172,000 May payrolls reading raised Treasury yields, increasing market odds that the Fed will raise rates later this year.

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Meanwhile, the Dow Jones Industrial Average, which carries less exposure to volatile tech names, still slipped 1.35% to finish the session at 50,866.78.

Overview

  • Markets plunged on Friday after the Labor Department said U.S. employers added 172,000 jobs in May, a stronger-than-expected print that pushed 2- and 10-year Treasury yields sharply higher and hurt high-valuation tech shares.
  • The sell-off accelerated after Broadcom reported weaker-than-expected guidance midweek, which helped unravel an AI-driven rally and left semiconductor names especially exposed.
  • The PHLX semiconductor index fell about 10% over two days and roughly $1.3 trillion in market value was erased from U.S.-listed chipmakers, with Nvidia, Micron and Broadcom among the largest decliners.
  • The move was broad across asset classes as investors sold equities, took profits in bitcoin and gold, and drove the VIX higher, reflecting a quick shift into assets seen as safer when yields rise.
  • Geopolitical tensions that have kept oil prices elevated add to inflation risk and complicate the Fed outlook, and traders now price a materially higher chance of a rate increase later this year ahead of the Fed’s next meetings.