NEW YORK — U.S. stocks declined Friday as bond yields rose following stronger-than-expected May jobs data that reduced expectations for near-term interest rate cuts by the Federal Reserve.
The S&P 500 fell about 1.4 percent, while the Nasdaq dropped around 2.6 percent to 2.8 percent, according to market reports. The Dow Jones Industrial Average lost roughly 300 points. Treasury yields climbed, with the 10-year note approaching or reaching 4.5 percent.
The Labor Department reported that nonfarm payrolls increased by 172,000 in May, well above economists' forecasts of around 85,000. The unemployment rate held steady at 4.3 percent.
"Robust employment data could lead to more hawkish Fed rate expectations," one market analysis noted, though specific quotes from officials were not immediately available.
The jobs figures followed an ADP private payrolls report earlier in the week that also showed strength, with gains of 122,000 in May. Markets had anticipated a more modest pace of hiring amid concerns over economic cooling and external pressures, including elevated oil prices linked to Middle East tensions.
Bond yields moved higher as the solid labor market data suggested the economy retains resilience, potentially giving the Fed more room to maintain higher rates to combat inflation risks. The 10-year Treasury yield rose toward 4.5 percent, building on earlier gains.
Tech shares, particularly in semiconductors and AI-related companies, led the decline. Broadcom dropped significantly after earnings-related developments, with Micron and Nvidia also lower. Defensive sectors such as banks, healthcare and consumer staples provided some support.
The moves came as traders digested the implications for monetary policy. Stronger jobs data lowered the odds of a rate cut in June to near zero, according to market pricing referenced in reports.
Broader context includes ongoing volatility tied to energy prices and geopolitical developments. Oil prices have risen amid tensions, contributing to inflationary pressures that influence both yields and equity valuations.
By late Friday, major indexes remained lower for the session. Details on closing levels and further sector performance were still emerging as trading concluded. The next jobs report is scheduled for July.
