Nasdaq Tumbles 4.2% on Strong Nonfarm Data as Fed Rate Hike Odds Hit 71.8%

According to Barron's, the Nasdaq Composite plunged 4.2% on Friday (June 5), marking its largest single-day decline since April 2025, as May U.S. nonfarm employment surged to 172,000, roughly double market expectations. The SPDR Technology ETF (XLK-US) fell 6.66% on the day, with a three-day cumulative loss of 9.1%.

The stronger-than-expected jobs report triggered a sharp reassessment of Fed rate hike expectations. Futures market data from the CME FedWatch showed a 71.8% probability of rate increases by December, with the 10-year U.S. Treasury yield climbing back above 4.50%. Bank of America strategists warned that historically, when unemployment rates (currently 4.3%) fall below inflation rates, markets have faced major turbulence—citing 1966, 1973, 1990, 2000, 2008, and 2021 as precedent years.