The US economy added 172,000 jobs in May. Economists had penciled in roughly 80,000. That kind of miss, where reality more than doubles the forecast, doesn’t just move markets. It rearranges them.

Friday’s stronger-than-expected employment data triggered a broad selloff across stocks, bonds, and crypto, as traders rapidly repriced the odds of a Federal Reserve rate cut anytime soon. The Nasdaq Composite plunged 4.2%, its steepest single-day decline since October of last year. The S&P 500 shed 2.6%, and the Dow Jones Industrial Average dropped nearly 700 points, or about 1.4%.

The jobs number that broke everything

The unemployment rate held steady at 4.3%, and payrolls came in at more than double consensus expectations. Ronald Temple, a market strategist, noted that the data effectively eliminated near-term hopes for a Fed rate cut.

Treasury markets reacted accordingly. The 10-year yield jumped to approximately 4.55%, climbing around seven basis points on the day. The 2-year yield, which is more sensitive to near-term rate expectations, rose to 4.16%.

The technology sector bore the brunt of the equity selloff. Growth and AI-related stocks are particularly vulnerable to rising rate environments because their valuations depend heavily on future cash flows.

Crypto caught in the crossfire

Digital assets didn’t escape the carnage. Bitcoin dipped toward $60,000 as the risk-off trade swept through every asset class.

Crypto-related equities fared even worse. Coinbase (COIN), Robinhood (HOOD), and MicroStrategy (MSTR) all declined by more than 6% on Friday.