According to the Bureau of Labor Statistics, the US job market has been working overtime—piling on 172,000 jobs in May, more than double the expected 80,000.

This feverish hiring spree is a sign that employers are shaking off Iran and inflation jitters and breaking out of their “low hire, low fire” rut, although only halfway. Hiring jumped, but firing didn’t budge, with unemployment holding firm at 4.3%, in line with forecasts. Average hourly wages also came in around the Wall Street consensus, rising 0.3% from last month and 3.4% since last year to $37.53—though, that’s the lowest annual increase in five years. To quote economist Heather Long, “It's easier to get a job now, but it's hard to find a job where your pay will keep up with current inflation.”

Some analysts chalk up this blowout to “catchup” hiring for roles that spent the last year on ice while tariff turmoil and government cuts had employers spooked. This BLS report also revised numbers for the previous two months, way up. March gained 29,000 jobs to total 214,000; April added 64,000 for 179,000.

Who’s hiring: Leisure and hospitality led the charge with 70,000 new gigs—five times its monthly average of 14,000—as bars and restaurants alone gobbled up 48,000 roles as they bulked up to brace for World Cup crowds. Beyond the hospitality boom, local governments weren't far behind with 55,000 hires, and healthcare did its dependable thing by adding another 35,000 positions.

What this means for rates: This red-hot report all but obliterates any chance that the Federal Reserve will slash interest rates at its next meeting June 16-17. According to the CME Fedwatch tool, the odds of a rate cut by end of year have shrunk to under 1%. Meanwhile, the odds of a rate hike have hit 50%.

This could be awkward for the Fed’s new Chair Kevin Warsh, whom President Donald Trump picked with none-too-subtle hopes of rate cuts. So far, though, the economy isn’t playing along. Inflation hit a three-year high of 3.8% in April, and the labor market is blinking. Both sides of the Fed’s dual mandate now point the same way, and neither is where Trump wants to go.

How markets reacted: This blockbuster jobs report kicked stocks in the pants right as they were already on their way down amid today’s chip sell-off. Investors, like Trump, have been eagerly waiting for rate cuts, and now that a cut isn’t in the cards, indexes caved.

Here’s to hoping those recently hired bartenders are up to speed ASAP, since Wall Street’s going to need a drink.—JD

🟢 What’s up

• FedEx Freight jumped 6.53% alongside fresh analyst coverage, extending gains after the freight carrier was spun off from FedEx and began trading independently on June 1.
• Medical device maker The Cooper Companies rose 8.58% on an earnings and revenue beat.
• Chipotle Mexican Grill climbed 3.99% after JPMorgan upgraded the stock, citing confidence in same-store sales growth.
• ServiceTitan surged 4.13% after delivering a fiscal first-quarter report that topped expectations across nearly every major metric.

What’s down

• Quantinuum fell 6.82% following a lukewarm Nasdaq debut yesterday, dragging quantum peers Rigetti Computing and D-Wave Quantum down 14.4% and 13.71%, respectively.
• Lululemon Athletica tumbled 8.56% after lowering its full-year outlook and issuing weaker-than-expected quarterly guidance.
• DocuSign dropped 7.22% as investors were unimpressed by the company’s outlook.
• Planet Labs tumbled 25.98% despite topping Wall Street forecasts, as investors rotated out of space stocks following a strong run-up earlier this year.
• Guidewire Software slid 10% as weak fiscal-year guidance overshadowed an earnings and revenue beat.
• Crypto-linked stocks Strategy and Coinbase fell 6.9% and 7.15%, respectively, as Bitcoin briefly dropped below $60,000 today.

Don’t get distracted by AI stocks ascending to the stars (literally), SpaceX launching the biggest IPO of all time, or even newfangled crypto tokens: Cash is still king.

At least that’s what the data is showing. Assets in money-market funds, which investors use like an elevated high-yield savings account, reached a record $8.29 trillion, according to Bloomberg.

Investors are searching for stability for good reason: Even while the stock market regularly reaches new highs, that bull streak is threatened by, well, pretty much every ominous headline you see. Instead of putting money in long-dated Treasuries, money-market funds offer exposure to short-term bonds, making them less sensitive to interest rates.

Since interest rates have stayed higher, investors aren’t getting a terrible deal, either: The current yield averages between 3.30% and 3.9%.

But there’s a flipside to all that caution, argues the Wall Street Journal’s Spencer Jakab. While a safety net is the first step in Personal Finance 101, most Americans are handing too much cash over to money-market funds. After inflation and taxes, investors aren’t making that much. Long term, even poorly timed investments in the broad market make more than these funds.

On a day like today, when the tumble in high-flying chip stocks is dragging the whole market down with it, the “T-bill and chill” strategy looks pretty nice. But there’s a middle ground between rabidly buying every new meme stock and avoiding any risk at all. —LB

Just like when a straight-A student brings home a 96 on the test instead of a 100, Broadcom suffered from unrealistic expectations.

Earlier this week, the semiconductor giant reported fiscal second-quarter earnings that were, by most measures, strong. While net income surged 88% year over year and topped expectations, revenue rose 48%, coming in just shy of forecasts.

That growth was driven by Broadcom’s booming AI business, which supplies both custom AI chips and the networking equipment needed to connect them, across six major customers including OpenAI, Anthropic, Google, and Meta.

But investors focused on the guidance instead: Broadcom said AI revenue would triple to $16 billion this quarter, but the forecast still fell short of expectations, and the company left its full-year AI target untouched. Still an A, but not quite an A+.

Shares fell 7.92% today, adding to yesterday's 12.6% plunge that erased roughly $280 billion in value—the fourth-largest wipeout ever for a US company—and dragged the broader chip sector lower as well.

Guilt by association

Broadcom is the chip-stock bellwether, and its stumble made investors nervous across the whole group. Micron was one of the first victims. Shares fell 13.25% today, a day after the company also suffered the largest market-cap wipeout in its history—a big blow for a stock that closed above $1,000 for the first time earlier this week. Meanwhile, Arm Holdings, Intel, AMD, and Qualcomm all lost more than 10% this afternoon.

Some investors argue the reaction is excessive. After all, Broadcom’s AI business is still growing at a blistering pace. But analysts see reasons for caution: TD Cowen noted that Broadcom’s margins are facing pressure as more revenue shifts toward lower-margin chip sales rather than its software business. Meanwhile, Evercore ISI’s Mark Lipacis pointed to signs that competitor MediaTek is gaining ground with Google, chipping away at a relationship Broadcom has maintained for more than a decade.

What this means for investors

So, is this a buying opportunity, or the beginning of a broader correction in AI stocks amid bubble concerns?

Citigroup still seems to think there is room left to run. While its Bear Market Checklist now shows 11.5 out of 18 warning signs—the highest reading since the financial crisis—that's still below the 17.5 flags seen during the dot-com bubble and the 13 flags that preceded the 2008 crash.

That’s good news for investors who still want in on the chip-stock action. Itau BBA analyst Stephano Gabriel said tightening memory supply and a growing number of long-term customer agreements could give Micron greater revenue visibility. Meanwhile, analysts expect several of Broadcom's custom AI chip programs to ramp up in the second half of 2027, potentially setting up stronger growth in 2028.

So, before getting swept up in the selloff, remember: Today's AI trade may have less of a growth problem than an expectations problem. And as Broadcom just learned, expectations can be the harder hurdle to clear. —SY

• Early on Friday, the Senate passed a $70 billion immigration enforcement bill, handing President Trump a W.
• S&P Dow Jones Indices said it won't change its eligibility rules for the S&P 500, so SpaceX and other blockbuster IPOs will have to wait at least a year to join.
• Anthropic called for AI labs to agree to slow down development in the name of safety.
• Start spreading the news, Broadway had a record year for ticket sales. Here’s what it tells us about consumer spending.
• Jensen Huang’s trip to South Korea is nothing short of a royal visit, as investors track his every move, including where he’s eating, sleeping, and stopping.

Reports: The New York Federal Reserve will release its Survey of Consumer Expectations for May.

Earnings: As earnings wind to a close, we’ll hear from The Campbell’s Company, Vail Resorts, Inc., and Pershing Square, Inc.

Everything else: Apple kicks off its Worldwide Developers Conference, where the company is expected to announce big changes to its AI strategy.