Strong US jobs data rattles global stock markets

Wednesday 10 - 08:59

By: Dakir Madiha

Strong US jobs data rattles global stock markets

US financial markets fell sharply after a stronger-than-expected employment report signaled continued economic resilience and reduced expectations for near-term interest rate cuts. The US economy added 172,000 jobs in May, nearly double economists’ forecasts of 80,000 to 85,000. The unemployment rate held steady at 4.3 percent, reinforcing the view of a stable labor market despite persistent inflation concerns.

Equity markets reacted immediately. The Nasdaq Composite dropped 4.2 percent in its worst single-day performance since April 2025. The S&P 500 declined 2.6 percent, ending a nine-week winning streak, while the Dow Jones Industrial Average fell 1.35 percent. Analysts linked the sell-off to rising bond yields and shifting expectations around monetary policy rather than weakening corporate fundamentals.

Bond markets tightened in response to the labor data. The 10-year Treasury yield climbed to 4.55 percent, its highest level since late May, while the 30-year yield moved above 5 percent. Investors scaled back expectations for a Federal Reserve rate cut, with futures pricing indicating minimal probability of any reduction in June and limited chances for cuts later in the year. Revised employment figures for previous months added further strength to the labor picture, while some analysts noted temporary hiring effects linked to large-scale event preparations.

Volatility spread quickly to global markets. South Korea’s Kospi index fell 8.3 percent at one point, triggering circuit breakers as technology-heavy stocks came under pressure. Major semiconductor firms also declined sharply. In the United States, sentiment partially stabilized in the following sessions, with the Nasdaq rebounding 0.9 percent as chipmakers led gains. Intel rose 11.2 percent and Micron advanced 9.9 percent during the recovery phase.

Despite the rebound, uncertainty persists over the policy outlook. Political criticism emerged over the market reaction to strong economic data, while investors continued to weigh the impact of higher yields on high-growth technology valuations. The combination of resilient labor conditions and restrictive monetary expectations keeps global equity markets sensitive to further economic surprises.