Nasdaq Drops 5% as Strong US Data Lifts Odds of a 25bp Fed Hike
Updated
Updated · bnpparibas-am.com · Jun 12
Nasdaq Drops 5% as Strong US Data Lifts Odds of a 25bp Fed Hike
3 articles · Updated · bnpparibas-am.com · Jun 12
Summary
The Nasdaq slid 5% after stronger-than-expected US labor data, then fell another 2% before rebounding, as investors repriced rate-sensitive technology stocks.
US private payrolls rose 120,000 in May, prior months were revised up, and unemployment fell, weakening the case for Fed rate cuts and pushing end-2026 odds of a full 25bp hike near 100%.
Other data reinforced the shift: ISM surveys showed expansion in services and manufacturing, core CPI rose 2.9% year on year with a softer 0.2% monthly gain, while core services inflation stayed above 4% and PPI remained hot.
The selloff also reflected lofty tech expectations, with earnings forecasts of 478% growth for Korean hardware stocks and 40%-60% for Taiwan and the US, leaving shares vulnerable to any disappointment.
Even so, the report argues valuations are not bubble-like: the Nasdaq trades around 23 times earnings versus about 48 at the March 2000 dot-com peak.