(Updates to mid-afternoon trading)

* Indexes down: Dow 0.85%, S&P 1.82%, Nasdaq 3.07%

* Semiconductors tank, set for biggest one-day drop since

Liberation Day tariff announcement

* Nasdaq on course for largest single-day fall since

October 10

* US adds 172,000 jobs in May, double analyst

expectations

By Stephen Culp and Medha Singh

NEW YORK, June 5 (Reuters) - Wall Street tumbled on

Friday as semiconductors extended their selloff while a robust

employment report fueled fears of a hawkish policy pivot from

the Federal Reserve.

All three major U.S. stock indexes were in negative

territory, with an 8.1% plunge in chips, their steepest

daily plunge since the "Liberation Day" tariff rout, dragging

the tech-laden Nasdaq down 3.1%, its largest one-day percentage

drop since October 10.

Over the last three days of selloffs, tech and chips have

tumbled more than 7.5% and 9.1%, respectively.

The S&P 500 was poised to snap its nine-week run of

Friday-to-Friday gains, its longest weekly winning streak since

one that ended in December 2023.

The Nasdaq was also on course to log a weekly decline, but

the blue-chip Dow was set for a nominal gain on the week.

Tech shares declined for a third straight session,

falling 4.6%.

The U.S. economy added 172,000 jobs in May, according to the

Labor Department, more than double analyst expectations, while

the unemployment rate held firm at 4.3%. The robust report was

double-edged: it provided reassurance of U.S. economic health,

but all but killed any hopes of an interest rate cut from the

Fed in the near future.

"It's a good report, and it shows that the labor market has

certainly survived its latest slowdown, and it's another reason

to believe that the Fed's next move will be a hike in interest

rates," said Peter Cardillo, chief market economist at Spartan

Capital Securities in New York.

Financial markets are pricing in a 42.8% likelihood of a

rate hike at the conclusion of the Fed's December meeting, up

from 38.2% on Thursday and 26.1% one month ago, according to

CME's FedWatch tool.

Fading hopes for a near-term resolution to the Middle East

war and reopening the Strait of Hormuz are stirring fears that

energy price pressures could morph into wider, systemic

inflation.

Iran reaffirmed its support for Hezbollah and demanded that

Israel withdraw its troops from southern Lebanon, further

complicating efforts to secure a near-term peace deal that would

include the resumption of traffic through the crucial strait.

U.S. President Donald Trump's administration has negotiated

three truces, and while fighting has been greatly reduced, the

two sides continue to trade airstrikes.

The CBOE Market Volatility Index, often dubbed the

"fear index," surged to a two-week high.

The Dow Jones Industrial Average fell 439.25 points,

or 0.85%, to 51,122.68, the S&P 500 lost 138.07 points,

or 1.82%, to 7,446.24 and the Nasdaq Composite lost

823.61 points, or 3.07%, to 26,007.35.

Among the 11 S&P 500 sectors, tech was down the most, while

consumer staples led the percentage gainers.

Nvidia ( NVDA ), the largest company by market value, lost

5.6%, while Intel ( INTC ), Micron, AMD and

Broadcom ( AVGO ) slid between 6.8% and 10.5%.

Lululemon Athletica ( LULU ) slumped 8% after the athletic

apparel maker cut its annual profit forecast and projected

second-quarter earnings well below Wall Street estimates.

Cooper Companies ( COO ) rose 7.6% after the contact lens maker

beat estimates for second-quarter results.

Cryptocurrency firms Coinbase and Strategy

dropped 9.5% and 11.2% as bitcoin tumbled 4.8%.

S&P Global said it would not change the eligibility requirements

for its major indices, which effectively rules out a swift entry

for Elon Musk's SpaceX to the benchmark S&P 500 after it goes

public in what would be the world's biggest initial public

offering.

S&P Dow Jones Indices will announce the results following

its rebalancing after markets close. Chipmaker Marvell

Technology, which boasts over $270 billion in

valuation, is among the contenders to be added to the benchmark

index.

Declining issues outnumbered advancers by a 2.8-to-1 ratio

on the NYSE. There were 108 new highs and 196 new lows on the

NYSE.

On the Nasdaq, 1,155 stocks rose and 3,548 fell as declining

issues outnumbered advancers by a 3.07-to-1 ratio.

The S&P 500 posted 14 new 52-week highs and three new lows

while the Nasdaq Composite recorded 76 new highs and 143 new

lows.