U.S. stock indices dropped on Friday, with the S&P 500 losing 2.64%, the Nasdaq 100 tumbling 4.77%, and the Dow slipping 1.35%. The decline was driven by a stronger-than-expected jobs report showing 172,000 nonfarm payrolls added in May, well above the 80,000 forecast, which raised expectations for Federal Reserve rate hikes. Chipmaker stocks led the sell-off, with U.S.-traded chipmakers losing approximately $1.3 trillion in market value, while Meta Platforms dropped amid reports of a planned large equity raise to fund AI expansion. The strong labor market data pushed the 10-year Treasury yield above 4.5% and the 30-year yield above 5%, intensifying pressure on rate-sensitive technology stocks.
May Jobs Report Exceeds Forecasts, Pushes Treasury Yields Higher
The Bureau of Labor Statistics reported on Friday that nonfarm payrolls increased by 172,000 in May, significantly exceeding the 80,000 jobs economists polled by Dow Jones had expected. The unemployment rate held steady at 4.3%. Following the report, the 10-year Treasury yield jumped above 4.5%, while the 30-year yield advanced above 5%. Ellen Zentner at Morgan Stanley Wealth Management stated in an interview with Bloomberg that the upside surprise underscores ongoing economic resilience but will likely keep the Fed and markets focused on inflation pressures. The S&P 500 recorded its first weekly decline for the week ending June 5, after gaining for nine consecutive weeks.
Chipmakers Lose $1.3 Trillion in Market Value
U.S.-traded chipmakers lost approximately $1.3 trillion in market value due to Friday's sell-off, according to Reuters. The VanEck Semiconductor ETF fell 10%, tracking the wider sell-off in tech and chipmaking stocks. Broadcom dropped 8%, Micron Tech fell 13%, ASML declined 7%, and Intel dropped 12% following the surge in Treasury yields. All of the magnificent seven tech shares dropped on Friday. The Nasdaq 100 recorded the worst day and week since April 2025. Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF ended Friday around 3% lower, while Invesco QQQ Trust dropped approximately 5.3%.
Google Agrees to Pay SpaceX $920 Million Monthly for Cloud Services
SpaceX disclosed on Friday a new multiyear cloud-service agreement with Google that will generate roughly $920 million per month starting in October. The agreement represents a significant revenue stream for SpaceX's cloud computing operations.
Individual Stock Movements on Friday
Tesla Inc shares fell 5% on Friday following reports that the company has postponed its planned public demo for its next-generation Roadster to August or later. Meta Platforms dropped amid a media report stating the company is weighing a large equity raise to help fund its expanding artificial intelligence ambitions. GameStop Corp Chief Executive Officer Ryan Cohen is escalating his pursuit of eBay Inc, signaling a willingness to launch a hostile takeover campaign after the e-commerce company's board of directors abruptly rejected his unsolicited $56 billion buyout offer, according to a media report. Boeing will begin building 737 Max aircraft on a new assembly line near Seattle on July 6 as it ramps up production. Strategy stocks dropped after Bitcoin prices crashed below $60,000.
FAQ
What caused U.S. stock indices to drop on Friday?
U.S. stock indices dropped on Friday primarily due to a stronger-than-expected jobs report showing 172,000 nonfarm payrolls added in May, well above the 80,000 forecast. This raised expectations for Federal Reserve rate hikes, pushing the 10-year Treasury yield above 4.5% and the 30-year yield above 5%, which pressured rate-sensitive technology and chipmaker stocks.
How much market value did U.S. chipmakers lose on Friday?
U.S.-traded chipmakers lost approximately $1.3 trillion in market value due to Friday's sell-off, according to Reuters. Major chipmakers including Broadcom, Micron Tech, ASML, and Intel experienced declines ranging from 7% to 13%.
What is the Google-SpaceX cloud service agreement?
SpaceX disclosed on Friday a new multiyear cloud-service agreement with Google that will generate roughly $920 million per month starting in October. The agreement covers cloud computing services provided by SpaceX to Google.
