Quick overview

---

Wall Street’s historic weekly run came to an end with a tech selloff and higher bond yields following a strong jobs report that increased expectations that the Federal Reserve would raise interest rates in the near future. Artificial intelligence shares, which had led a rise from this year’s lows, plummeted at the same time as the Fed repriced its outlook

 

The S&P 500 fell 2.6 percent due to growing concerns about valuations, and the index failed to complete a 10-week run of gains. The Nasdaq 100 saw its biggest decline since April 2025, falling by roughly 5%.

The latest leg of the bull market, which dates back to the end of March when serious negotiations to end the war in Iran started, suffered its biggest setback in months with the coordinated decline in stocks, bonds, and cryptocurrencies.

The sustainability of an AI-driven surge that propelled the Philadelphia Semiconductor Index to its best quarter ever has recently raised concerns.

The US labor market may be emerging from a protracted period of weak hiring, as evidenced by job growth exceeding all projections in May, and the unemployment rate remained stable at 4.3%. According to Ellen Zentner of Morgan Stanley Wealth Management, “today’s upside surprise underscores ongoing economic resilience, but it will also likely keep the Fed – and the markets – focused on inflation pressures.”

The market may be interpreting today’s positive economic news as negative news for equity prices, but this is a reflexive response as bond markets reprice the Fed path. While an inflationary boom is beneficial to stocks, stagflation is detrimental. ”Fed policymakers next meet June 16-17 under the leadership of new Chairman Kevin Warsh“If Chair Warsh pushes for cuts at his first meeting, .