Dow slips as strong US jobs data sparks chip selloff, hits Nasdaq

• Money markets now assign 98% probability to a 25 basis point Fed rate hike before year-end, up sharply from 60% odds before the jobs report
• Chip stocks led declines with Nvidia down 2% and AMD, Intel, Micron, and Broadcom falling 3-5.5%; Marvell dropped over 6%
• Treasury yields climbed with the 10-year rising above 4.5% and 30-year moving above 5% as investors reassessed rate cut expectations

Market Summary: Strong Jobs Data Triggers Tech Selloff

Key Market Movements:

U.S. equities diverged Friday following robust May employment data. The Dow Jones gained 20 points, while the S&P 500 fell 0.6% and the Nasdaq Composite dropped 1.07%. The S&P 500 is headed for its first weekly decline since April.

Jobs Report Details:

The Bureau of Labor Statistics reported 172,000 jobs added in May, substantially exceeding expectations of 80,000-85,000 and up from April's 115,000. The unemployment rate held steady at 4.3%, matching forecasts.

Fed Policy Implications:

The strong labor data dramatically shifted Federal Reserve expectations. Money markets now price in a 98% probability of a 25 basis point rate hike before year-end, up from 60% pre-report. Treasury yields surged, with the 10-year climbing above 4.5% and the 30-year exceeding 5%. This comes ahead of Fed Chair Kevin Warsh's first policy meeting later this month.

Semiconductor Selloff:

Chip stocks led declines after their recent AI-driven rally. Nvidia fell 2%, while Intel, AMD, Micron Technology, and Broadcom dropped 3-5.5%. Marvell Technology plunged over 6%. Broadcom declined 3% following Thursday's 12.5% tumble on disappointing quarterly revenue, raising valuation concerns across AI stocks.

Other Developments:

• Middle East tensions persisted as Hezbollah rejected a Lebanon ceasefire proposal
• Lululemon Athletica dropped 8.7% after cutting annual profit guidance
• Cooper Companies rose 8% on strong quarterly results
• Citi reduced equity exposure citing inflation risks despite maintaining long-term AI-optimism
• S&P Global confirmed SpaceX won't receive immediate S&P 500 inclusion

The market rotation suggests investors are reassessing high-valuation tech positions amid rising rate expectations.