Jobs surprise, Broadcom selloff push yields higher, stocks fall

U.S. equity markets declined after the May jobs report showed payrolls rose by 172,000 and the unemployment rate held at 4.3%. The 10-year Treasury yield rose to roughly 4.54%, and traders moved to fully price a 25-basis-point Federal Reserve rate hike by December.

The payrolls reading exceeded expectations of about 80,000 and prompted higher yields across the curve. The average 30-year fixed mortgage rate is near 6.66%, compared with 6.87% a year earlier. Higher Treasury yields reduced the discounted value of earnings farther in the future, pressuring growth-oriented stocks.

Chipmaker Broadcom reported quarterly results on June 3 that beat on earnings but lowered near-term AI revenue guidance. Broadcom guided third-quarter AI revenue to about $16 billion versus analyst expectations near $17.2 billion and left its $100 billion AI revenue target unchanged. The stock fell about 15% on June 4 and declined further in subsequent sessions, amplifying losses across semiconductor and AI-exposed names.

Nvidia slipped about 4%, while AMD and Intel each fell near 8%. Oracle and Micron posted sharp declines. The semiconductor group had led much of May’s market rally, and the sector’s pullback removed a major source of recent gains.

Major indexes moved lower. The S&P 500 fell 1.69% to about 7,455. The Nasdaq Composite lost 2.82% to roughly 26,074. The Russell 2000 dropped 2.63% to about 284.32. The Dow Jones Industrial Average declined 0.75% to 51,172.7. Market breadth was negative, with decliners outnumbering advancers about 68% to 29%.

Investors rotated into defensive, yield-bearing areas of the market. Consumer defensive stocks gained about 1.9%, healthcare rose about 1.0% and real estate added roughly 0.7%. Utilities edged up near 0.2%. Basic materials led losers, down about 4.4%, and the technology sector fell roughly 4.3% as the chip rout accelerated. Energy and financials posted modest declines.

Smaller-cap and retail-focused names also weakened. Robinhood shares fell about 7%, pressured by lower crypto trading activity and a decline in Bitcoin below $60,000 that reduced trading volumes tied to the platform.

On the technical side, the S&P 500 pulled back to roughly 7,455 after reaching a recent high near 7,620. Short-term traders will watch whether the index can reclaim 7,628, the 0.618 Fibonacci retracement level, or drop below support near 7,448 and then 7,332.

Market participants said they will watch whether the 10-year Treasury yield remains above the post-report level near 4.54% and how upcoming economic releases and corporate reports affect rate expectations and sector flows.