03:27 PM EDT, 06/05/2026 (MT Newswires) -- US equity indexes plunged as a strong jobs report slashed the odds for interest rate cuts this year, sending mega-cap chip names into a tailspin.

The Nasdaq Composite slumped 3.8% to 25,818.6, with the S&P 500 down 2.4% to 7,399.8, and the Dow Jones Industrial Average lower by 1.3% to 50,908.5 ahead of Friday's close. Technology was the standout decliner, while consumer staples and real estate topped the gainers.

In a third straight month of growth, nonfarm payrolls surged by 172,000 in May, above the 88,000 jobs increase expected in a Bloomberg-compiled survey. April was revised upwards to a 179,000 increase, and March payrolls were revised upwards to a 214,000 increase, the Bureau of Labor Statistics said Friday. The net upward revision came in at 93,000 jobs, bringing the 3-month average of payroll increases to 188,000, the strongest pace since March 2024, according to notes from Morgan Stanley and Stifel.

The probability of a 25 basis-point increase in interest rates in December surged to 43%, from 36% a week ago, according to the CME FedWatch tool. The comparisons for September were 33% versus 20%, and, for October, the data showed an increase to 39% from 25%.

US Treasury yields soared, with the 10-year up 6.1 basis points to 4.54% and the two-year higher by 11.3 basis points to 4.16%.

A potential peace deal between the US and Iran hinges on US President Donald Trump's administration agreeing to release $24 billion in frozen Iranian assets, Mohsen Rezaei, military adviser to Supreme Leader Ayatollah Mojtaba Khamenei, told CNN from Tehran, warning that the US would "enter into a dark corridor" should it resume fighting.

"The negotiations are at a deadlock and Trump must break this deadlock," Rezaei was cited as saying. "The ball is in Trump's court."

West Texas Intermediate crude oil futures declined 2.4% to $90.62, and Brent crude futures fell 1.9% to $93.18.