Wall Street staged a forceful rebound on Friday, with the S&P 500 reclaiming the 6,000 level for the first time since February, a day after enduring its worst session of the year. A stronger-than-expected jobs report and signs of a thaw in the Trump-Musk feud powered the recovery, even as bond yields surged and the Federal Reserve’s rate-cut timeline receded further into the distance.
The Dow Jones Industrial Average jumped more than 400 points, or roughly 1.2%, while the S&P 500 added about 1% to close at 6,000. The Nasdaq Composite gained 1.2%, clawing back a fraction of Thursday’s bruising 4.18% decline — the worst single-day performance for the tech-heavy index in 2026. Thursday’s carnage erased over $1.2 trillion in market capitalization from semiconductor stocks alone, as AI-linked equities buckled under the weight of rising rate expectations and a Broadcom revenue miss that spooked the chip complex.
Tesla shares led Friday’s rebound, surging after signals that the acrimonious standoff between President Donald Trump and CEO Elon Musk was easing. Retail investors scooped up a net $201.3 million of Tesla stock on Thursday’s dip, according to Vanda Research, making it the day’s second-most actively purchased name among self-directed traders. Broadcom, despite posting better-than-expected earnings of $1.58 per share on $15 billion in revenue, saw its shares slip more than 4%, as forward guidance disappointed a market already on edge about chip demand.
Jobs Data Reshapes Fed Expectations
The May employment report came in well above consensus, delivering a jolt to rate-cut optimists. Traders slashed bets on Federal Reserve easing this year after the data showed robust hiring and accelerating wage growth. Treasury yields surged across the curve, with the benchmark 10-year note climbing 10 basis points to 4.49%, and shorter-dated maturities posting even steeper increases. Every tenor now sits above 4%, a threshold that seemed unlikely just weeks ago.
The overall U.S. consumer is holding up reasonably well. Year-over-year trends for April and May were better than those for February and March, suggesting the labor market’s resilience is feeding through to household spending.
UBS equity strategist Sunny Mehra noted that the consumer picture remains intact despite macroeconomic uncertainty, a signal that the Fed may feel little urgency to cut rates when inflation remains above target and payrolls continue to surprise to the upside. Fed officials have reiterated a data-dependent stance, with Governor Williams noting that “gradual disinflation remains on track” but declining to commit to a timeline for easing.
Commodities and Currencies Find Footing
Oil prices rose sharply, with West Texas Intermediate climbing nearly 2% to settle above $64 a barrel, logging its largest weekly gain since November. The stronger jobs data eased fears of a demand slowdown, prompting algorithmic traders to reduce short positions. Brent crude also advanced, supported by ongoing supply concerns tied to geopolitical tensions in the Middle East. Gold held steady near recent highs, with the precious metal consolidating above $3,300 an ounce as investors balanced safe-haven demand against a rising-rate environment.
The U.S. dollar index firmed on the back of the jobs report and surging yields, pressuring emerging market currencies. The euro slipped below $1.085, while the Japanese yen weakened past 156 per dollar, reigniting speculation that Tokyo may intervene in foreign exchange markets after drawing down reserves at a record pace in May. The dollar’s strength added another headwind for commodities priced in greenbacks.
Bitcoin Stabilizes After Week of Liquidations
Cryptocurrency markets found a tentative floor after a bruising week that saw Bitcoin plunge below $60,000 for the first time since October 2024. The world’s largest digital asset recovered to around $62,000, but the damage was extensive: more than $1.6 billion in leveraged positions were liquidated across exchanges in the 72 hours spanning Thursday and Friday. Ethereum dropped an additional 10% at the week’s lows, and the total crypto market capitalization shed roughly $84 billion.
The sell-off was compounded by a 13-day streak of outflows from Bitcoin exchange-traded funds, the longest since the products launched in early 2024. Analysts attributed the exodus to a combination of rising real yields, which erode the appeal of non-yielding assets, and a rotation back into risk-on equities as the stock market rebounded. The crypto sector now faces a critical test: whether Bitcoin can hold the $60,000 support level that has defined the bottom of its range for the past eight months.
Week Ahead: Trade Talks, ECB, and Inflation Data
Investors now turn their attention to a packed calendar. President Trump announced that U.S.-China trade discussions will take place in London next week, a development that could reshape the tariff landscape and calm markets — or ignite fresh volatility if talks stall. The European Central Bank convenes on June 11, with markets pricing a roughly 90% probability of a rate hike after ECB President Christine Lagarde flagged an upward revision to the bank’s inflation forecast. Stateside, the May Consumer Price Index report will provide the next critical read on whether the Fed’s preferred disinflation narrative remains credible.
Brown-Forman shares are heading toward their worst weekly decline since 1987 despite Friday’s bounce, and DocuSign tumbled 18% after lowering its full-year billings guidance. Meanwhile, Porsche dismissed a Bloomberg report that it was considering shifting final assembly to the United States to mitigate tariff exposure, underscoring the ongoing tension between trade policy and corporate strategy. The week ahead will test whether Friday’s rebound has legs — or whether the worst day of the year was merely a prologue.
Written by James Wright, Economy Correspondent
