US Equity Indexes Dive as Blockbuster Jobs Report Boosts Fed Rate Increase Bets

12:25 PM EDT, 06/05/2026 (MT Newswires) -- US equity indexes slumped amid a sell-off in mega-cap chip names and government bonds, as a strong jobs report lifted the odds for an interest rate increase this year.

The Nasdaq Composite sank 2.4% to 26,209.1, with the S&P 500 down 1.4% to 7,478.3, and the Dow Jones Industrial Average lower by 0.6% to 51,277.2 in Friday's midday trading. Technology was the standout decliner, while healthcare and consumer staples topped the gainers.

In a third straight month of growth, nonfarm payrolls surged by 172,000 in May, above the 88,000 jobs increase expected in a Bloomberg-compiled survey. April was revised upwards to a 179,000 increase, and March payrolls were revised upwards to a 214,000 increase, the Bureau of Labor Statistics said Friday. The net upward revision came in at 93,000 jobs, bringing the 3-month average of payrolls to 188,000, according to a note from Morgan Stanley.

The probability of a 25 basis-point increase in interest rates in December surged to 43%, from 36% a week ago, according to the CME FedWatch tool. The comparisons for September were 33% versus 20%, and, for October, the data showed an increase to 39% from 25%.

US Treasury yields soared, with the 10-year up 6.1 basis points to 4.54% and the two-year higher by 10.8 basis points to 4.16%.

Skirmishes continued overnight between Hezbollah and Israel in southern Lebanon after the Iran-backed militant group rejected a US-brokered proposal aimed at securing a broader truce, Bloomberg reported. Even so, Hezbollah's attacks on northern Israel have eased, while Israel has held off striking Beirut after threatening to do so earlier this week, it added.

West Texas Intermediate crude oil futures declined 2.6% to $90.64, and Brent crude futures dropped 1.8% to $93.35.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.