Wall Street Ends Sharply Lower as Chips Slide, Jobs Data Fuels Rate Hike Fears

💡 US stocks tumble as chipmakers weigh on indices, jobs data boosts rate hike expectations

The US stock market closed sharply lower on Thursday as tech-heavy indices were weighed down by losses in chipmakers. The S&P 500 fell 1.8% to 3,775.50, while the Nasdaq Composite dropped 2.5% to 11,331.50. $SPY declined 1.9% to $374.21, while $QQQ fell 2.6% to $384.15.

Jobs Data Fuels Rate Hike Fears

The US economy added 200,000 jobs in May, exceeding expectations of 175,000. However, the unemployment rate rose to 3.7% from 3.5% in April. The strong jobs data has fueled expectations of a rate hike by the Federal Reserve, leading to a sell-off in stocks. $TLT fell 1.2% to $118.50 as bond traders repriced the timing of the first rate cut.

Chipmakers Weigh on Indices

Chipmakers such as $NVDA and $ADI fell sharply on Thursday, leading to a decline in the tech-heavy Nasdaq Composite. $NVDA fell 4.2% to $530.15, while $ADI declined 3.5% to $155.20.

Rate Hike Expectations Rise

The strong jobs data has led to an increase in rate hike expectations. The Federal Reserve is expected to raise interest rates by 50 basis points in June, according to a survey of economists. $TICKER $SPY fell 1.9% to $374.21 as rate hike expectations rise.

What It Means for Investors