Nasdaq 100 Drops 3% as Strong Jobs Data Revives Rate Hike Fears

Benzinga reported Friday that U.S. tech stocks suffered a punishing midday selloff after May’s nonfarm payrolls report came in dramatically hotter than expected, stoking fresh rate hike fears across global markets.

Jobs Data Blindsides Markets

The U.S. economy added 172,000 jobs in May, nearly double the 85,000 analysts had forecast. Prior readings for March and April were revised upward by a combined 93,000. The unemployment rate held at 4.3%. That resilience, stacked against April’s consumer price index print of 3.8% year-over-year, its highest since May 2023, gave traders little reason to expect the Federal Reserve to ease anytime soon.

Money markets responded swiftly, pricing a near-certain quarter-point hike before year-end. Roughly 60% odds of a further increase in 2027 were also priced in by midday.

Treasury Yields and the Dollar Surge

The policy-sensitive 2-year Treasury yield jumped more than 10 basis points to 4.15%. The 10-year yield climbed to 4.54%. The trade-weighted U.S. Dollar Index gained close to 1%, reflecting broad demand for greenback exposure in a higher-rate environment.

Background: Fed Has Held Rates Steady

The Federal Reserve has kept its benchmark rate on hold through much of 2025 and into 2026, after an aggressive tightening cycle that began in 2022. Policymakers had signaled patience while watching inflation cool. Friday’s data complicated that posture significantly, putting Chair Jerome Powell and colleagues back on the defensive heading into summer.

Equity Selloff Is Broad but Tech Bears the Brunt

The Nasdaq 100 fell 3.2%, its steepest single-session loss since October 2025, as high-growth AI and semiconductor names retreated sharply. The S&P 500 shed 1.8%. The Dow Jones Industrial Average, less exposed to rate-sensitive tech, slipped just 0.8%. Small caps were also hit hard, with the Russell 2000 falling around 2.6%.

Wall Street’s fear gauge, the CBOE Volatility Index, surged 21%. Commodities joined the rout, with gold dropping 3.1% and silver tumbling nearly 7%. The Technology Select Sector SPDR Fund slid roughly 5%, dragged lower by semiconductor and AI hardware names. Defensive sectors offered the only meaningful shelter on the day.

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