US May job gains surge, spurring Wall Street sell‑off

The U.S. Bureau of Labor Statistics reported that non‑farm payrolls rose by 172,000 jobs in May, more than double the consensus forecast of 80,000‑85,000. The surprise prompted a swift market correction: the S&P 500 fell about 1.4%, the Nasdaq Composite slipped roughly 2.4%, and the Dow Jones Industrial Average dropped over 280 points. Technology and semiconductor shares led the losses, with Nvidia down 2.5% and Intel, Micron, AMD and Broadcom each losing between 4% and 6%.

Investors rotated into consumer‑staples and defense stocks, and money markets now price a near‑certain 25‑basis‑point Federal Reserve rate hike before year‑end. The new Fed chair, Kevin Warsh, faces a dilemma between pressure from the White House for lower rates and the stronger‑than‑expected labour market. Job gains were concentrated in lower‑wage sectors—leisure and hospitality added 70,000 jobs, local government 55,000 and healthcare 35,000—while financial activities shed 22,000 jobs. Average hourly earnings rose 12 cents, with year‑over‑year wage growth unchanged at 3.4%.