The US economy added 172,000 jobs in May, more than double what Wall Street expected. Consensus estimates had pegged nonfarm payrolls at roughly 80,000 to 85,000. The unemployment rate held steady at 4.3%, reinforcing the picture of a labor market that refuses to cool down despite months of policy uncertainty.
Markets didn’t take it well
The Nasdaq composite dropped approximately 4% on June 5 as investors digested the implications. The odds of a Federal Reserve rate hike by the end of 2026 jumped to roughly 70% following the report. Before the data landed, that probability sat around 50%.
Eric Lynch, managing director at Suncoast Equity Management, captured the mood when he flagged concerns about both potential monetary tightening and the lack of returns from massive AI spending.
The AI spending problem
