Stock market today: US stocks drop, bond yields jump after strong jobs report

US stocks moved lower on Friday after a hotter-than-expected May jobs report sent bond yields surging.

272,000 jobs were added to the economy in May, well ahead of economist estimates of about 180,000, while average hourly earnings rose to 4.1% from 3.9% annually.

The 10-year US Treasury yield spiked on the report, jumping 11 basis points to 4.40%.

Despite the strong jobs report, the unemployment rate rose to 4.0% from 3.9%, driven by a decline in labor participation. That represents the highest unemployment rate since January 2022.

The strong payroll gains poured some cold water on the prospects of an imminent interest rate cut from the Federal Reserve, though chances for a rate cut in September remain in play.

According to the CME FedWatch Tool, there's a 50% chance of an interest rate cut in September, compared to a 55% chance before the jobs report was released.

Carson Group strategist Sonu Varghese said the big takeaway from the May jobs report is that the consumer is overall doing just fine.

"Even though the unemployment rate rose, the big picture is that it's hard to see the consumer as being weak given the increase in job growth and above average wage growth in May," Varghese told Business Insider.

Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Friday:

• S&P 500: 5,336.11, down 0.33%
• Dow Jones Industrial Average: 38,796.56, down 0.23% (-79.78 points)
• Nasdaq composite: 17,111.25, down 0.35%

Here's what else is going on today:

• Elon Musk's $56 billion pay package will likely see overwhelming approval from its shareholders, according to Dan Ives.
• GameStop stock plunged 20% after the video game retailer pre-announced lackluster earnings and filed a prospectus to sell more stock.
• All eyes will be on Keith Gill as he gears up for his first YouTube live stream in more than three years.

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil was flat at $75.55 a barrel. Brent crude, the international benchmark, was lower by 0.15% to $79.75 a barrel.
• Gold edged lower by 2.08% to $2,341.20 per ounce.
• The 10-year Treasury yield jumped 11 basis points to 4.40%.
• Bitcoin jumped 0.81% to $71,342.