U.S. Nonfarm Payrolls Add 172K in May, Triggers Bond Yield Surge and 10% Semiconductor Selloff

According to the U.S. Department of Labor, nonfarm payrolls added 172,000 jobs in May on June 6, significantly exceeding market expectations of 80,000, while the unemployment rate remained steady at 4.3%. The stronger-than-expected employment data cooled market expectations for Federal Reserve rate cuts, sending Treasury yields sharply higher.

The 10-year Treasury yield surged over 6 basis points to 4.544%, marking a two-week high, while the 2-year yield jumped over 11 basis points to 4.162%, reaching its highest level since February 2025. Rising bond yields triggered a sharp equity selloff, with investors rotating away from higher-valuation tech stocks. The Semiconductor ETF plunged over 10%, and all four major U.S. stock indices declined. Economist Christopher Rupkey from Fwdbonds noted that with labor markets this strong, the Fed has little reason to cut rates and should focus on inflation risks.