NEW YORK — Technology stocks led a sharp selloff on Wall Street on Friday after a stronger-than-expected U.S. jobs report for May raised expectations that the Federal Reserve may keep interest rates higher for longer.
The U.S. Bureau of Labor Statistics reported that nonfarm payrolls rose by 172,000 in May, well above economists' forecasts of around 85,000 to 88,000 jobs. The unemployment rate held steady at 4.3 percent, the agency said.
The data triggered a broad market decline, with the Nasdaq Composite falling about 4.2 percent, its largest one-day drop in more than a year. Technology shares, particularly those tied to artificial intelligence and semiconductors, were among the hardest hit.
Nvidia shares dropped around 6.2 percent, Broadcom fell nearly 8 percent, and Micron Technology declined more than 13 percent, according to market reports. The selloff in major technology companies erased significant market value, with the nine largest tech firms in the S&P 500 losing an average of about 5.3 percent.
The stronger jobs numbers boosted Treasury yields and shifted investor expectations away from near-term rate cuts. The S&P 500 declined approximately 2.6 percent, while the Dow Jones Industrial Average fell about 1.4 percent.
"This is a strong jobs report from every angle," one analyst noted following the release.
The jobs data included upward revisions to prior months. April was revised higher to show 179,000 jobs added, the BLS said. Sectors such as professional and business services contributed to the gains, while some areas like financial activities saw losses.
The market reaction reflected concerns that persistent labor market strength could complicate the Fed's efforts to manage inflation. Fed officials have emphasized a data-dependent approach in recent communications. The central bank's next policy meeting is scheduled in the coming weeks.
Some market participants pointed to recent earnings and guidance from technology companies as additional factors in the selloff. Broadcom had reported results earlier in the week that raised questions about the pace of AI-related demand.
Trading volume was elevated as investors adjusted positions ahead of the weekend. White House officials commented positively on the jobs figures as evidence of economic strength.
As of Monday, markets were monitoring subsequent economic data and corporate earnings for further signals on the outlook. No immediate policy announcements came from the Federal Reserve over the weekend. Details on the full economic impact of the jobs report continue to be assessed by analysts.
