Stocks opened lower Friday, June 5, after the U.S. Bureau of Labor Statistics reported that the economy added 172,000 jobs in May — more than double what economists expected — sending bond yields higher and giving the Federal Reserve fresh reason to keep interest rates where they are. The unemployment rate held steady at 4.3%, as expected, while average hourly earnings rose 0.3% for the month and 3.4% over the past year. The report landed on top of a second straight day of selling in chip stocks, pressure from the ongoing U.S.-Iran conflict, and a sharp drop in Bitcoin, leaving Wall Street with a rough open to end a nine-week winning streak.

In late-morning trading, the S&P 500 was down about 0.6% and the Nasdaq Composite fell roughly 1.1%, dragged lower by technology and semiconductor names. The Dow Jones Industrial Average barely moved, edging up less than 0.1% and holding near the record high it set Thursday. The Russell 2000 bucked the trend, rising about 1.4% as money moved out of big technology companies and into other corners of the market.

Good News Treated as Bad News

The jobs number was the morning’s main event, and the market’s reaction shows how unusual the current environment remains. A strong labor market is normally something investors welcome. But with inflation still elevated, traders interpreted stronger-than-expected hiring as another reason the Federal Reserve may keep interest rates higher for longer.

Treasury yields moved sharply higher following the report, weighing on stocks.

The details strengthened the picture further. The Bureau of Labor Statistics revised March payroll growth up by 29,000 to 214,000 and April up by 64,000 to 179,000, leaving the two months a combined 93,000 jobs higher than previously reported.

Job gains were led by leisure and hospitality, which added 70,000 positions, followed by local government with 55,000, health care with 35,000, and manufacturing with 7,000.

“The third consecutive consensus-beating gain in nonfarm payrolls in May should further reduce concern among the FOMC about the downside risks to the labor market,” said Stephen Brown, Chief North America Economist at Capital Economics, noting that stronger hiring makes it more difficult for policymakers to overlook persistent inflation pressures.

The numbers arrive less than two weeks before the Federal Reserve’s June 16–17 policy meeting.

Chip Selling Spreads After Broadcom

The other major force pulling stocks lower was a second day of weakness across semiconductor shares.

The selloff began Thursday after Broadcom reported strong results but did not raise its full-year forecast for artificial-intelligence chip sales. Chief Executive Hock Tan reiterated guidance for AI semiconductor revenue exceeding $100 billion and said the company would focus on selling chips rather than complete integrated systems.

By Friday morning, the weakness had spread across the sector.

Micron Technology fell about 3.3%, while Intel and Advanced Micro Devices each dropped roughly 2.8%. Nvidia slipped about 1.4%.

Among AI infrastructure companies, Dell Technologies and Super Micro Computer each lost around 2.7%, while optical-networking supplier Lumentum Holdings declined approximately 3.5%.

Despite the pullback, analysts largely characterized the move as a pause rather than a fundamental shift in the AI investment story.

KeyBanc Capital Markets raised its price target on Broadcom to $575 from $500, while Bernstein analyst Stacy Rasgon said the company’s long-term growth outlook remains intact despite near-term concerns.

War, Oil and Bitcoin Remain in Focus

The conflict involving Iran continued to hover over markets.

Brent crude oil traded near $95 a barrel Friday, slightly higher on the day. While prices have eased from recent highs, crude remains well above levels seen before tensions escalated earlier this year.

Meanwhile, Bitcoin fell roughly 3.5% to around $61,900, adding to a difficult week for digital assets amid continued outflows from cryptocurrency investment funds.

For investors, the challenge remains straightforward. The economy appears stronger than expected, but that strength may reduce the likelihood of near-term Federal Reserve rate cuts just as the artificial-intelligence trade that powered much of this year’s rally takes a breather.

JBizNews Desk — Wall Street

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