U.S. stocks fell on Friday after a better-than-expected May jobs report sent bond yields soaring.
The economy added 272,000 jobs in May, well above economists’ expectations of about 180,000, while average hourly earnings rose 4.1% from 3.9% a year earlier.
The 10-year Treasury yield surged following the report, rising 11 basis points to 4.40%.
Despite the strong employment report, a decline in labor force participation caused the unemployment rate to rise from 3.9% to 4.0%, the highest unemployment rate since January 2022.
The strong payroll growth poured cold water on prospects for an interest rate cut from the Federal Reserve in the near future, although a cut in September remains a possibility.
According to the CME FedWatch tool, there is a 50% chance of a rate cut in September, up from 55% before the jobs report was released.
Sonu Varghese, a strategist at Carson Group, said the big takeaway from the May jobs report is that consumers are generally doing well.
“While the unemployment rate rose, overall consumers are unlikely to be weak given the job gains in May and above-average wage growth,” Varghese told Business Insider.
Below are U.S. stock indexes as of the start of trading at 9:30 a.m. on Friday.
What else is happening today:
Commodities, Bonds and Cryptocurrencies:
- West Texas Intermediate crude oil was unchanged at $75.55 a barrel, while the international benchmark Brent crude oil was down 0.15% to $79.75 a barrel.
- Gold fell 2.08% to $2,341.20 per ounce.
- The yield on the 10-year Treasury note rose 11 basis points to 4.40%.
- Bitcoin rose 0.81% to $71,342.
