Stocks dip despite strong jobs report as yields near warning level
Wall Street fell after a robust employment report, with analysts linking the drop to higher Treasury yields and concerns about inflation, while President Trump disputed the market reaction on social media.
"With a great Jobs Report, like just announced, stocks should go up, not down. That's the way it was for 200 years. Growth does not mean inflation!" – President Donald Trump on Truth Social
U.S. equity markets slipped on Friday after the Labor Department released a strong jobs report, contradicting the expectation that such data would boost stocks. The Dow Jones Industrial Average fell 0.3%, while technology shares such as Marvell and Micron dropped about 9%, as investors reacted to a rise in Treasury yields – the 10‑year yield climbed to 4.54% and the 30‑year to over 5%.
Barclays' head of U.S. equity strategy, Venu Krishna, said the market is entering a “warning zone” as yields approach the 5% level, increasing the discount applied to future earnings and pressuring valuations of companies whose profits are expected farther out, particularly AI and semiconductor firms. He noted that investors are rotating toward consumer staples with more immediate cash flows.
The sell‑off comes amid broader economic pressures, including elevated consumer spending, supply‑chain constraints, higher energy prices, and a tightening labor force. Analysts highlighted that while demand remains strong, the mismatch with limited supply sustains inflation above the Federal Reserve’s 2% target, limiting the central bank’s ability to cut rates.
Despite the dip, Krishna said the AI sector could present buying opportunities if prices fall further, and the market’s correction may ease concerns ahead of a busy IPO season that includes a high‑valued offering from SpaceX.