Tech selloff spreads to Asia after blowout U.S. jobs report

Strong US Jobs Report Sparks Rate Hike Bets, Rattles Markets

The U.S. economy added 172,000 jobs in May, nearly doubling the consensus forecast of roughly 80,000 to 85,000, the Bureau of Labor Statistics reported on Friday, June 5. The blowout employment data sent shockwaves through global markets, lifting Treasury yields, strengthening the dollar, and triggering a sharp selloff in equities and commodities as traders recalibrated expectations for Federal Reserve policy.cnbc

Markets Reprice the Fed

The unexpectedly strong labor figures — combined with upward revisions to March and April payrolls totaling 93,000 additional jobs — quickly reshaped the interest rate outlook. According to the CME FedWatch tool, the probability of a Fed rate hike by year-end jumped to 70%, a dramatic shift from earlier expectations of possible cuts. On the prediction market platform Kalshi, the likelihood of a rate increase this year surged to 52%, up 253% over the prior week.cnbc

The 10-year Treasury yield climbed about 6 basis points to 4.54% on Friday, while the rate-sensitive 2-year yield rose roughly 10 basis points to 4.16%. The S&P 500 fell about 2%, while the Nasdaq Composite dropped roughly 4% in its worst session in over a year. Gold tumbled more than 2.5%, touching its lowest level since late March, as the stronger dollar and higher yields eroded the appeal of non-yielding assets. The dollar climbed to a near two-month high.cnbc

Ripple Effects Across Asia

The fallout extended into Asian trading on Monday. SoftBank dropped 6% as a broader tech selloff accelerated across the region, with investors retreating from AI-linked stocks after the Nasdaq’s steep weekly decline. Japan’s Nikkei 225 also fell, losing 1.44% in Monday’s session.cnbc

A Labor Market That Won’t Cool

Leisure and hospitality led May’s job gains, adding 70,000 positions — five times its recent monthly average — possibly buoyed by World Cup-related hiring, according to CNBC. Local government added 55,000 roles, and healthcare contributed 35,000. The unemployment rate held at 4.3% for a third consecutive month, while average hourly earnings rose 0.3% monthly and 3.4% year-over-year, both in line with expectations.td

The Fed, which cut rates three-quarters of a percentage point in late 2025, has held steady throughout 2026 amid persistent inflation — core PCE remains at 3.3%. The central bank’s next meeting on June 16-17, which will be new Chair Kevin Warsh’s first, now carries added weight as markets debate whether the next move will be up rather than down.defirate