Stocks Suffer Sharp Selloff as Strong Jobs Data Fuels Rate-Hike Fears – US Market Wrap

Wall Street’s historic run of weekly gains came to an end as a sharp technology selloff combined with rising bond yields after a stronger-than-expected jobs report reinforced expectations that the Federal Reserve’s next move could be a rate hike.

The shift in rate expectations coincided with a significant pullback in the artificial-intelligence stocks that had driven the market’s rebound from this year’s lows. Concerns about stretched valuations sent the S&P 500 down more than 2.5%, preventing the index from recording a tenth consecutive week of gains. The Nasdaq 100 fell roughly 5%, its largest drop since April 2025, while a semiconductor index tumbled 10%. Meta Platforms declined 5.5% following reports the company is considering a large stock sale.

The broad selloff across equities, bonds, and cryptocurrencies marked the biggest setback in months for the rally that began in late March as optimism grew around efforts to end the war in Iran. Investors have increasingly questioned the sustainability of the AI-driven advance, particularly after semiconductor stocks approached one of their strongest quarters on record.

While the employment data pointed to continued economic resilience, it also complicated the inflation outlook at a time when energy-related price pressures remain elevated. Treasury two-year yields jumped 12 basis points to 4.16%, with derivatives markets fully pricing in a Federal Reserve rate increase by the end of 2026. The dollar strengthened, while Bitcoin slid toward $60,000.