S&P 500 Snaps Streak, Nasdaq Tumbles 4.2% as Jobs Data Lifts Rate Hike Odds

The S&P 500 ended a nine-week winning streak and the Nasdaq Composite sank 4.2% on Friday — its steepest drop since April 2025 — after the May employment report stunned markets with 172,000 new jobs, roughly double the consensus estimate. Earlier-month figures were revised up by 93,000, pushing fed funds futures to price in a 71.8% probability of at least a quarter-point rate hike by December. AI and technology stocks bore the brunt of the sell-off. The State Street Technology Select Sector SPDR ETF (XLK) tumbled 6.66% on Friday and lost 9.1% over three sessions, though it remains up 25% for the year. The rout spread across asset classes: the 10-year Treasury yield climbed back above 4.5%, gold dropped $223 to $4,337.10 an ounce — down more than 18% from its January high — and the dollar strengthened. Upcoming equity offerings, including a SpaceX IPO and Alphabet’s recent $85 billion financing, are viewed as classic late-cycle signals that companies are selling stock near market peaks. Next week’s CPI report, with an expected 4.2% year-on-year reading, will test whether the tightening narrative intensifies further.