S&P 500 Falls 2.6% as Tech Stocks Drop on Jobs Data

The S&P 500 fell 2.6% on Friday, its largest single-day drop since October 10, as technology stocks declined and a stronger-than-expected jobs report shifted expectations about Federal Reserve policy. The benchmark index closed at 7,383.74 after dropping 200.57 points.

The Nasdaq composite lost 1,121.53 points to finish at 25,709.43, while the Dow Jones Industrial Average declined 695.15 points to 50,866.78.

Nvidia fell 6.2%, Broadcom dropped 7.9%, and Micron Technology slid 13.3%, the largest loss among S&P 500 companies. Meta shares declined 5.5% after a report indicated the company may issue new stock to fund artificial-intelligence spending. Stocks across the S&P 500 were nearly evenly split between gainers and losers, but the larger technology companies carry heavier weight in the index.

The Labor Department reported the U.S. added 172,000 jobs in May. The 10-year Treasury yield rose to 4.54% and the 2-year yield increased to 4.16% after the data release. Ronald Temple, chief market strategist at Lazard, said in a note that hopes for a Federal Reserve rate cut had been eliminated by the jobs report.

Market pricing showed more than a 60% chance the central bank will raise rates by year-end and little chance of a cut.

Brent crude settled 2% lower at $93.09 per barrel. The U.S. conflict with Iran has restricted shipments through the Strait of Hormuz, and fuel prices have risen as a result. Lululemon shares fell 8.6% after the company lowered its revenue and profit forecasts. The S&P 500 has gained 7.9% for the year through Friday.