Stock Market Impact: Nasdaq Composite fell 4.2% to 25,709.43, S&P 500 down 2.6% to 7,384.59, ending a nine‑week winning streak; Dow Jones Industrial Average dropped 1.4% to 50,866.78.
Listed Companies and Sectors: Technology and chip stocks led losses; defensive sectors (consumer staples, healthcare, utilities, real estate) rose. Lululemon Athletica cut its full‑year financial forecast, shares fell more than 8%; DocuSign fell 7.2% after reporting flat quarterly net dollar retention; Cooper Companies rose 8.6% after beating quarterly top‑ and bottom‑line estimates and updating its surgical business review.
Investment Flows: Rising Treasury yields and a stronger U.S. dollar made government bonds less attractive, prompting a bond sell‑off; Fed funds futures now price a 100% chance of a rate hike by year‑end, with a 7% probability of an additional hike.
Interest Rates, Inflation, and Liquidity: U.S. Bureau of Labor Statistics reported May non‑farm payrolls increased by 172,000 (expectation 85,000) and unemployment held at 4.3%; revisions added 93,000 jobs for March and April combined. The data heightened expectations of further Federal Reserve rate hikes, reducing the likelihood of near‑term cuts.
Fiscal or Monetary Policy: The Federal Reserve announced a chair transition from Jerome Powell to Kevin Warsh. President Donald Trump, speaking on Truth Social, called for lower rates despite the strong jobs report, reiterating his preference for rate cuts.
