The Nasdaq fell 4.18% today. Worst day since April 2025. The S&P lost 2.65%. The Dow dropped 695 points. A trillion dollars was wiped from semiconductor stocks in a week. And the trigger was a number that should be good news: 172,000 jobs created in May — double the 85,000 the Street expected. Unemployment held at 4.3%. March and April were revised higher. The economy is growing. People are working. And the market fell apart because a strong economy means the Fed has no reason to wait. Rate hike odds jumped to 98% in one morning. The first negative week in ten. The rotation that started Thursday — Dow up, Nasdaq down — turned into a rout where everything fell. This is what happens when the rally meets a number it can't explain away.
Red across the board. The Nasdaq lost 4.18% to close at 25,709 — its biggest single-day drop since the tariff panic in April 2025. The S&P 500 fell 2.65% to 7,384. The Dow dropped 695 points to 50,867. The Russell 2000 was the only bright spot, gaining about 1.5% as small caps benefited from the strong domestic economy. For the week, the S&P fell more than 2% — its first losing week in ten.
| The Numbers I Circled |
At the close, June 5 · Day change |
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| Nasdaq |
25,709 |
−4.18% |
| May NFP |
172,000 jobs |
2x consensus |
| Rate Hike Odds |
98% by year-end |
was ~60% |
| S&P 500 Sectors |
Day change |
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| Energy |
|
−0.5% |
| Utilities |
|
−0.7% |
| Consumer Staples |
|
−0.8% |
| Health Care |
|
−1.0% |
| Financials |
|
−1.2% |
| Industrials |
|
−1.3% |
| Materials |
|
−1.5% |
| Real Estate |
|
−2.0% |
| Consumer Discretionary |
|
−2.5% |
| Communication Services |
|
−3.0% |
| Information Technology |
|
−5.0% |
| Biggest Losers |
Day change |
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| Notable Gainers |
Day change |
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The chip selloff that started with Broadcom on Wednesday became something bigger today. CNBC called it a selling event where "the intensity reached a new level." A trillion dollars was erased from semiconductor stocks in three sessions. Broadcom fell again. Marvell, Micron, and Super Micro all extended Thursday's losses. The catalyst was a mix: Broadcom's flat AI outlook Wednesday, the sector rotation Thursday, and then this morning's jobs number — which sent Treasury yields spiking and made every high-multiple tech stock worth less by the minute.
The jobs report was the match. Nonfarm payrolls came in at 172,000 — more than double the 85,000 consensus. Leisure and hospitality added 70,000 jobs alone, partly driven by hiring ahead of the World Cup that starts June 11. Local government added 50,000 for security and infrastructure. March and April were both revised higher. The labor market isn't cooling. It's reheating. Futures markets repriced immediately: the odds of a 25-basis-point rate hike before year-end went from about 60% to 98% in an hour.
Lululemon fell 10% after cutting its full-year outlook. Bitcoin slid to $61,900 — down 3.5% — and is on pace for its worst week since February. Michael Saylor's Strategy sold bitcoin for the first time since 2022, and only the second time ever.
What The Market Is Pricing In
Stocks don't price today. They price the next six to twelve months. And what the market priced today is a Fed that is almost certain to hike rates — and a chip trade that can't hold when yields go up.
Here's the chain. The economy created 172,000 jobs. That's strong. People are working. Businesses are hiring. That's the good news. But here's the thing about markets: sometimes good news for the economy is bad news for stocks. When the economy creates more jobs than anyone expected, it means people have more money to spend. When they spend more, prices go up. When prices go up, inflation stays hot. And when inflation stays hot, the Fed has to raise interest rates to slow things down. Higher rates make every dollar of future earnings worth less today — and the companies with the highest future earnings expectations — chip stocks, software stocks, AI stocks — get hit the hardest. On Wall Street they call this the "good news is bad news" trade. It's one of the most disorienting things about markets. The economy is doing well. Stocks are falling. And both of those statements are true at the same time.
The jobs report doubled expectations, rate hike odds jumped to 98%, and the Nasdaq fell 4% — the market just told you that the Fed is almost certainly hiking at or before the September meeting, and the ten-week rally built on "maybe the Fed holds" is being repriced from the foundation up. For ten weeks the market's assumption was: oil falls, inflation eases, the Fed stays on hold, and AI earnings carry the tape. Today two of those four legs broke. Oil is still volatile. And the jobs number said the economy is too strong for the Fed to sit still. The AI earnings leg already cracked with Broadcom. Now the macro leg cracked with the jobs number. Two legs down out of four.
I remember June 2022. The May CPI came in at 8.6% — above the 8.3% expected. The S&P fell 3.9% in two days. Two weeks later the Fed raised rates by 75 basis points — the first hike that large in 28 years. The market had been hoping inflation was peaking. It wasn't. Today's parallel: the market was hoping the economy was cooling enough for the Fed to hold. It isn't. When the data miss is this large — 172,000 versus 85,000 — the selloff isn't a pullback. It's a repricing. And repricings take more than a day to resolve.
The forward-looking read: the FOMC meets June 17-18. Warsh's first meeting as chair. The Fed updates its economic projections and its dot plot — the chart that shows where each Fed governor expects rates to go. Before today, the market expected the dots to show one cut this year. After today, the market expects the dots to shift toward one hike. If that happens, the 10-year goes back above 4.6%, the 30-year goes back above 5%, and the equity math from last week — the equity risk premium at 0.17 — gets even worse. The ten-week rally gained 20%. Today's selloff gave back about 3%. The question for the weekend: is this the 3% dip before the rally resumes, or the first 3% of a bigger correction?
Three things I'm watching this weekend and into next week:
01 — The FOMC meeting June 17-18
Warsh's first meeting as chair. The Fed will update its Summary of Economic Projections, including the dot plot. Before today's jobs number, the dots were expected to show one cut. After 172,000 jobs, the dots will shift. If the median dot moves to one hike, the bond market reprices and equities face a second leg down. If Warsh surprises with patience — if he frames the strong jobs number as temporary (World Cup hiring, government infrastructure) — the market gets breathing room. Listen to the press conference, not the statement.
02 — SpaceX IPO June 12
The largest IPO in history — $75 billion at $135 per share — is scheduled for a week from today. The roadshow is live. If the chip selloff continues and the rate-hike repricing deepens, SpaceX is launching into a storm. If the market stabilizes, SpaceX absorbs a lot of the speculative capital that left bitcoin this week. Watch the pricing: if SpaceX prices below $135, the IPO market is telling you risk appetite has peaked.
03 — Oil direction through the weekend
Israel and Lebanon have a ceasefire. Trump signaled Iran progress this weekend. Oil fell Friday. But the Strait is still shut and the SPR is at 1980s lows. If oil stays below $93 into Monday, the inflation part of the jobs number gets easier and the Fed math softens. If oil spikes back above $98 on another Iran headline, the rate-hike trade hardens and the selloff extends.
A trillion dollars left chip stocks this week. The jobs number doubled expectations. Rate hike odds hit 98%. And the ten-week winning streak ended. The Nasdaq's 4% drop is either the flush that clears the deck for the next leg up — or the first real crack in a rally that went too far, too fast. The FOMC in twelve days will tell us which.
That's it for today. Have a good weekend. I'll be back on Monday after the close.
— Tom Hartley
Today In Perspective · Published daily, Monday–Friday, after the close
This newsletter is for informational purposes only and does not constitute investment advice. The author is not a registered investment advisor. Past performance does not guarantee future results. Consult a qualified financial professional before making investment decisions.
