The US stock market witnessed its largest decline in months on Friday, influenced by the increasing likelihood of Federal Reserve interest rate hikes following the release of robust May payroll data. According to the Bureau of Labor Statistics, the economy added 172,000 jobs last month, significantly surpassing expectations of approximately 80,000.
The strong employment numbers led to a significant increase in treasury yields, with two-year yields surging to 4.17% and the 10-year yield climbing to 4.55%. This shift in monetary policy expectations had a negative impact on stocks, resulting in substantial declines for major indices, including the Nasdaq Composite, S&P 500, and Dow Jones Industrial Average.
Semiconductor and AI-related stocks were particularly affected by the downturn, with Nvidia experiencing a nearly 6% drop and Oracle plummeting by over 10%. The selling pressure also extended to cryptocurrencies and commodities, as Bitcoin fell below $60,000 for the first time since October 2024. Gold prices dropped significantly, with a decline of more than 3.5%.