Stocks Plummet Amid Strong Jobs Data, Rate Hike Probabilities Rise

Market Volatility Surges Following Blowout Jobs Report and Middle East Tensions

NEW YORK - A strong jobs report in the United States has led to a sharp decline in stock prices, with investors turning defensive ahead of the weekend amidst growing tensions in the Middle East. The U.S. Federal Reserve's decision to potentially raise interest rates late this year has fueled bets, causing a sell-off in technology shares and other sectors.

Key Market Indicators:

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The Dow Jones Industrial Average fell 1%, while the S&P 500 lost 2.4% and the Nasdaq Composite dipped 4%. The sharp decline in stock prices was led by a selloff in technology shares, including AI chipmaker Nvidia. Shares in Broadcom were down nearly 7%, continuing losses since the semiconductor company reported underwhelming results on Wednesday.

The strong jobs report, which showed U.S. employers added far more jobs than expected in May, bolstered bets that the Fed could raise rates late this year. U.S. Treasury yields surged following the report, with the yield on the 2-year note hitting a 15-month high of 4.164%. The yield on the 2-year note typically moves in step with Fed rate expectations.

The pan-European STOXX 600 index eased 0.29%, while MSCI's gauge of stocks across the globe fell 2.23%. Oil prices slipped after Oman said operations at Mina al Fahal port were proceeding normally following a Reuters report that oil loadings had been suspended after an explosion.

Oil Prices:

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Brent crude futures fell 2% to settle at $93.09 a barrel, while U.S. crude dipped 2.69% to $90.54 per barrel. Both oil contracts were set to post their first weekly gains in three weeks. In currencies, the yen settled around the 160 per dollar level and was last down 0.09% at 160.12, as Japanese officials ramped up warnings about the ailing currency, keeping traders on alert for further intervention from Tokyo.

Data on Friday showed Japan's foreign reserves fell by $77 billion in May. The euro was down 0.74% at $1.1523, while sterling weakened 0.64% to $1.3334. The dollar index was on track to gain 0.62%, supported by the Middle East conflict. Cryptocurrencies extended recent declines, with bitcoin shedding 6.04% to $59,746.51 and heading for a weekly decline of nearly 18%. Spot gold fell 3.49% to $4,317.64 an ounce.