1. Employment data exceeded expectations
Non-farm payrolls are an important indicator of the health of the U.S. job market. The 272,000 new jobs in May exceeded market expectations, indicating that the U.S. economy is in good shape and the job market is strong.
2. Market expectations of rate hikes have increased
Strong employment data usually means strong economic activity, which may lead to increased inflationary pressure. In order to control inflation, the Federal Reserve (Federal Reserve System) may take interest rate hikes. This expectation often triggers market volatility, especially in the stock market.
3. Uncertainty in Fed policy
Increased market expectations of Fed rate hikes may cause investors to worry about rising borrowing costs and corporate earnings. This uncertainty will trigger short-term selling pressure in the stock market.
4. Investor sentiment and market reaction
Investors tend to react quickly to macroeconomic data, especially to major data that may affect monetary policy. Strong employment data has increased investors' expectations of the possibility of rate hikes, causing stock market futures to fall rapidly.
Summary
In short, the U.S. non-farm payrolls data in May exceeded expectations, showing a strong economy. This triggered market expectations of a Fed rate hike, increased market uncertainty and investor concerns, and caused futures for major U.S. stock indexes to plummet.