US stocks suffer sharp sell-off as strong jobs data fuels rate fears

The Nasdaq suffered its biggest one-day fall since April 2025 on Friday as a surprisingly strong US jobs report stoked fears that the Federal Reserve will keep interest rates higher for longer. The tech-heavy index dropped more than 4%, dragging the S&P 500 down 2.6% and the Dow Jones Industrial Average 1.35% lower. The sell-off came after data for April showed the labour market remained unexpectedly robust, prompting investors to abandon bets that the central bank would soon cut borrowing costs. “The figures raised the likelihood the Federal Reserve will raise interest rates this year,” said David Doyle, head of economics at Macquarie Group, who described the report as potentially “too good” against a backdrop of high inflation. Digital assets followed the rout, with bitcoin falling sharply as traders fled riskier assets. But the downturn did not trigger a global panic. Instead, investors rotated out of technology stocks — which critics have warned are overvalued and reminiscent of the dotcom bubble — and into traditionally safer sectors such as healthcare, utilities and consumer staples, including Kraft Heinz and Keurig Dr Pepper. US President Donald Trump criticised the negative reaction to the jobs numbers, saying “too much emphasis is placed on inflation” and that “the market should go up not down” when the economy performs well. Next week, Trump is set to host leading AI executives at the White House to discuss a proposal for the US government to take public stakes in their firms, a move he said would allow everyday Americans to “benefit from the success of AI”. The sharp drop highlights how vulnerable big tech stocks have become as a few companies now account for such a large chunk of the market that any shift in sentiment can drag the entire market down.