New York stocks closed lower across the board as expectations grew that the Federal Reserve (Fed) would raise interest rates on the back of a strong U.S. job market.
On the 5th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 50,866.78, down 695.15 points (-1.35%) from the previous session. The Standard & Poor's (S&P) 500 fell 200.63 points (-2.65%) to 7,383.68, and the Nasdaq composite lost 1,121.53 points (-4.18%) to 25,709.43.
Even last month, the unexpected resilience of the U.S. job market spread expectations that the Fed could raise rates within the year, souring investor sentiment.
According to the U.S. Department of Labor's Bureau of Labor Statistics, the month-over-month increase in nonfarm payrolls last month was 172,000, more than double the expert forecast of an 80,000 gain (Dow Jones consensus).
Despite concerns that a surge in energy prices from the U.S.-Iran war could slow the economy, the U.S. employment picture beat expectations last month, boosting expectations that the Fed's monetary policy stance would turn hawkish (favoring monetary tightening).
Accordingly, semiconductor stocks and other names that had led the recent rally saw steep declines. Intel and AMD fell 11.28% and 10.86%, respectively, posting double-digit drops. Lam Research also fell 9.85%. Broadcom, which disappointed on earnings on the 3rd, tumbled 7.92% on the day, plunging for a second straight session.
Memory makers Micron Technology and SanDisk also fell 13.25% and 11.39%, respectively.
Among major big tech corporations, Nvidia fell 6.2%, and Microsoft also slipped 2.66%.
International oil prices fell on the day on expectations of easing tensions in the U.S.-Iran war. On the New York Mercantile Exchange, West Texas Intermediate (WTI) futures settled at $90.54 per barrel, down 2.7% from the previous session. Brent futures also fell 2.0% to $93.09 per barrel.