U.S. stock markets opened with mixed performance on Friday evening, Beijing time. The tech-heavy Nasdaq index fell sharply, impacted by declines in semiconductor shares. The U.S. added 172,000 non-farm payrolls in May, far exceeding expectations, while the unemployment rate held steady at 4.3%.

The Dow Jones Industrial Average rose 39.90 points, or 0.08%, to 51,601.83. The S&P 500 index fell 54.24 points, or 0.72%, to 7,530.07. The Nasdaq Composite Index dropped 314.537 points, or 1.17%, to 26,516.421.

A stronger-than-expected May jobs report reinforced the view of a resilient U.S. labor market, sending Treasury yields sharply higher on Friday.

The benchmark 10-year Treasury yield, which influences mortgage and other borrowing costs, rose 5 basis points to 4.534%, its highest level since May 21. The more policy-sensitive 2-year Treasury yield climbed 7 basis points to 4.115%, its highest since May 20.

The 30-year long bond yield, which often moves with geopolitical risk, jumped 5 basis points to 5.021%. A basis point equals 0.01%, and yields move inversely to prices.

U.S. chip stocks extended their recent slide on Friday, continuing a sector-wide sell-off triggered by Broadcom's earnings the prior session. Broadcom fell another 1%, remaining under pressure after Thursday's 12.5% plunge. Advanced Micro Devices dropped nearly 3%, Intel fell over 2.5%, and ARM Holdings declined about 5%. NVIDIA showed relative resilience, slipping only about 1%.

The sell-off was ignited by Broadcom's fiscal second-quarter results released Wednesday after the close. Although the company's quarterly performance beat expectations—with non-GAAP EPS of $2.44 and revenue of $22.19 billion, up 48% year-over-year—the outlook for its AI chip business disappointed the market. Broadcom forecast third-quarter AI semiconductor revenue of about $16 billion, a more than 200% increase year-over-year but below the consensus analyst estimate of $17.2 billion. Furthermore, the company reiterated its fiscal 2027 AI chip revenue target of "over $100 billion," failing to raise it significantly as the market had hoped, which triggered the investor sell-off.

Notably, capital did not fully exit the stock market but rotated out of high-valuation tech stocks into blue-chip sectors like financials and healthcare. This rotation helped drive the Dow Jones Industrial Average up 874 points on Thursday to a record-high close.

Wall Street is divided on this pullback. Bridgewater Associates founder Ray Dalio warned that the AI sector is showing signs of a bubble, with current market sentiment indicators approaching levels seen during the 2000 dot-com bubble. However, some analysts view the decline as a short-term correction rather than a trend reversal. Options market data shows some investors are treating this pullback as a "buy the dip" opportunity, positioning in chip stocks by selling put options. J.P. Morgan also stated in its mid-year outlook that the AI supercycle is just beginning and that market sentiment is overly pessimistic.

On Thursday, the blue-chip Dow Jones Industrial Average rose 874.86 points, or 1.73%, to close at a record high. The S&P 500 gained 0.41%, while the Nasdaq Composite edged down 0.09% as funds rotated out of the technology sector.

"Many of us wanted to see a broadening of the market, but the broadening now, I think, is not away from the 'Magnificent 7' but actually away from semiconductor equipment and hardware," said Charles Kantor, senior portfolio manager at Neuberger Wealth. "We saw some of that today, but the demand pipeline for compute and data center build-out is still very strong from now until 2030."

The S&P 500 is up less than 0.1% for the week so far. This slight gain puts it on track for a tenth consecutive weekly advance, which would be its longest winning streak since 1985. The Dow is on pace for a 1% weekly gain, while the Nasdaq Composite could close down 0.5% for the week.

On the economic data front Friday, U.S. non-farm payrolls increased by 172,000 in May, far exceeding expectations, with the unemployment rate steady at 4.3%.

The U.S. Bureau of Labor Statistics reported Friday that job growth unexpectedly surged in May, indicating continued robust expansion in the American labor market.

After seasonal adjustment, non-farm payrolls increased by 172,000 in May, slightly below the upwardly revised 179,000 in April but well above the Dow Jones estimate of 80,000. The unemployment rate was unchanged at 4.3%, in line with expectations.

The report comes as market expectations had been subdued, with employers in a "low-hire, low-layoff" environment taking a wait-and-see approach. While job gains were concentrated in a few sectors and layoff levels remained relatively mild, there are signs that artificial intelligence is beginning to impact the workforce.

Recently, Federal Reserve officials have taken a more optimistic view on the employment situation, shifting their focus more to stubborn inflation—effectively ruling out further interest rate cuts. After cutting the benchmark rate by a cumulative 0.75 percentage points in the second half of 2025, the Fed has been on hold this year.

Fed policymakers have largely maintained a stance of observing developments throughout the year before deciding on a policy path.

Overall economic growth remains solid. According to Atlanta Fed data, first-quarter GDP grew at an annualized rate of 1.6%, with second-quarter growth currently tracking at 3%.