Hot Jobs Data Reframes Rates Outlook, Pushing S&P 500 Down $1.4T

May payrolls rose 172,000—well above expectations—while unemployment held at 4.3% and inflation hovered near 3.8%, spurring a shift from expectations of rate cuts to bets on higher-for-longer rates. That outlook sent Treasury yields higher and erased about $1.4 trillion of S&P 500 market value in a single session, marking a dramatic re-pricing of rates despite a resilient economy. Investors also weighed big equity raises and AI-related IPOs (Meta, SpaceX, Anthropic, Alphabet) that could widen supply, reinforcing concerns that higher rates could persist into 2027 while earnings and valuations navigate the new regime.