New York Stocks Plunge on Strong Jobs Data and Chip Sell-off

New York's stock markets ended the week with a steep decline, as robust US employment figures bolstered expectations of a more aggressive monetary policy from the Federal Reserve. The technology-heavy Nasdaq bore the brunt of the sell-off, recording its sharpest daily drop since April 2025.

The US Department of Labor's report showed nonfarm payrolls increased by 172,000 in May, significantly exceeding market forecasts. While the unemployment rate remained stable at 4.3%, previous months' data were revised upward, indicating underlying labor market resilience. Analysts noted that persistent high inflation levels could prompt the Fed to consider interest rate hikes by year-end.

Treasury yields climbed following the data release, with the 10-year yield surpassing 4.5% and the 30-year yield exceeding 5%. Cleveland Fed President Beth Hammack commented that interest rates should remain steady for now, but indicated a potential move could be appropriate if current trends continue.

The tech sector, particularly chip stocks, experienced a significant downturn. Broadcom, Marvell Technology, Micron Technology, Nvidia, AMD, and Intel all saw substantial share price drops. Geopolitical tensions in the Middle East also contributed to investor caution, with analysts citing a lack of concrete progress in diplomatic efforts to end conflicts as a dampening factor on risk appetite.

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Today for the economic outlook, uncertainty is reasonable to keep interest rates steady. However, if recent trends continue, it may be appropriate to move soon.