S&P 500 erases $1.4 trillion in market value after stronger-than-expected jobs report shifts rate-cut expectations

The S&P 500 declined roughly $1.4 trillion in market value on Friday, marking the benchmark index's steepest one-day decline since October 2025, after the Bureau of Labor Statistics reported 172,000 jobs added in May with unemployment holding at 4.3%—roughly double economist expectations.

Investors shifted from expecting up to 4 rate cuts in 2026 to pricing in meaningful odds of rate hikes extending into 2027, as strong employment data combined with inflation running near 3.8% led traders to reprice Federal Reserve policy expectations upward.

Meta Platforms is exploring a stock offering worth tens of billions of dollars for AI infrastructure investments, following Alphabet's $85 billion equity raise and ahead of projected IPOs for SpaceX at $1.75 trillion valuation and Anthropic at $1.8 trillion valuation, raising concerns about equity supply pressure on institutional capital.