ServiceNow (NOW) Falls 5% After Strong May Jobs Data Dims Rate-Cut Prospects

ServiceNow (NYSE:NOW) shares fell 5% on June 5, 2026, after a much-stronger-than-expected May U.S. jobs report reduced the likelihood of near-term Federal Reserve interest rate cuts. The economy added 172,000 nonfarm payrolls, far exceeding the 85,000 consensus, while the unemployment rate held at 4.3%. The robust data reinforced expectations that the central bank will keep rates elevated, directly pressuring growth stock valuations by discounting future earnings at higher rates. The decline extended a software-sector selloff driven by profit-taking after a rapid recovery. The IGV software index surged 21% in May alone, but the rally was heavily options- and retail-driven, leaving institutional investors on the sidelines. At $113.31 per share, ServiceNow is down 23.2% year-to-date and trades 45.8% below its 52-week high from July 2025.