WSJ What’s News - Why Stocks Are Diving After a Strong May Jobs Report

Episode Date: June 5, 2026

P.M. Edition for June 5. The U.S. added 172,000 jobs in May, the third month in a row of steady gains. Economics reporter Matt Grossman explains why job-seekers may not be sharing that optimism. Plus, a sharp selloff in tech stocks led the Nasdaq to its worst day of 2026. What’s News in Markets host Imani Moise says investors are worried about higher interest rates and AI demand. And… a $419 hotel tab on a family vacation? DoorDash orders totaling $1,576? Scott Calvert discusses how public watchdogs are blowing the whistle on local officials’ spending, and why taxpayers are so angry about it. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Visit BetMGM Casino and check out the newest exclusive. The Price is Right Fortune Pick. BetMGM and GameSense remind you to play responsibly. 19 plus to wager. Ontario only. Please play responsibly. If you have questions or concerns about your gambling or someone close to you, please contact connects Ontario at 1-866-531-2,600 to speak to an advisor,

free of charge. BetMGM operates pursuant to an operating agreement with Eye Gaming Ontario. Another month of strong jobs growth is making it more likely that the Fed will raise interest rates, not cut them. Plus, the NASDAQ had its worst day of 2026, falling more than 4% on worries about inflation and AI demand. And $264 for a fish dinner, public official spending is making taxpayers furious. There was beer can coolers in Daytona Beach, Costco groceries in Connecticut, and there's another community in North Carolina where somebody bought ammunition with their town credit card. It's Friday, June 5th.

I'm Alex O'Soulev for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. The jobs market had another strong showing in May. A report out today from the Labor Department says that the U.S. added 172,000 jobs last month, blowing past analyst expectations. Meanwhile, the unemployment rate

held steady at 4.3%. WSJ economics reporter Matt Grossman says that suggests the labor market is recovering from a weaker period last fall in winter. We got a really strong jobs report for May, and not only that, but we got really strong upward revisions to job creation in March and April. And so now things are looking really a lot brighter than they were at the start of the year. Over many of the past several months, health care and social services and education were some of the most important sectors in hiring. Things have broadened out quite a bit. So in May, hiring was really strong in leisure and hospitality. That's jobs like restaurant and hotel workers. There were job gains in manufacturing and construction. And local governments actually added a lot of workers as

well. But Matt says that many people are still anxious about the job market and the economy. It can still be a frustrating labor market. If you're someone who is looking for a job, and you've been on the sidelines for a long time. And wage growth in May was pretty weak, and that's been a trend for several months now. Stagnating wage growth is coming at a time when expenses are rising. And obviously, that's a really challenging combination. As for the Fed, this report makes a rate cut less likely than a rate hike this year. Some Fed officials have already begun suggesting that in recent days,

and futures markets reflect a roughly 50% bet that the Fed will raise rates at its October meeting. That meeting is less than a week before the midterm. That might be a tough situation for the new Fed chair Kevin Warsh, who President Trump picked because he wants him to lower interest rates. SpaceX is expected to make its stock market debut next week in what could be the biggest IPO ever. And as the company works to drum up investor interest, banks are sharing their projections with select investors. Morgan Stanley is one of the banks working with SpaceX on its IPO. We're exclusively reporting that the bank told its top investors that SpaceX's revenue could reach $3.4 trillion. in 2040. Last year, SpaceX posted revenue of $18.7 billion and a loss of $4.9 billion.

So how would the company hit Morgan Stanley's projections? Bankers anticipate that revenue from SpaceX's small AI business will grow dramatically and that it'll make up the bulk of the company's revenue after this year. And today, SpaceX said that Google has agreed to pay it nearly a billion dollars a month in a cloud computing deal that gives SpaceX a new stream of revenue for its AI business. Meanwhile, thousands of current and former SpaceX employees who own a piece of the company are eagerly awaiting the IPO. These engineers, technicians, and baristas who worked on SpaceX campuses will be able to cash in way more easily after SpaceX is public, earning them thousands or even millions of dollars. And for more on SpaceX, on What's New Sunday, we'll be discussing how its IPO could redefine the global space economy.

And WSJ's Take On the Week podcast also out this Sunday will be digging into whether SpaceX is really worth its target. targeted $1.77 trillion valuation. Earlier this week, we told you about the firms behind indexes like the NASDAQ 100 that were making it easier to add companies to their benchmarks just after they go public in this year of the mega IPO. Some index providers say this helps track the market more accurately, but skeptics say it can add risk for investors because there's not as much public information available about newly listed companies, and they could be paying too much for the stock. Investors expected the S&P 500 to fast-track IPOs too. But now S&P Dow Jones indices says that it actually won't do that. The decision means that the newly listed companies will

have to wait at least a year before they can be included in the index. WSJ investing calmness Jason Zweig has been following the issue. And earlier this week, he told us index providers should keep the best interests of investors, not the companies, in mind. But he says that if you want to hop on the mega IPO train, there are plenty of ways to do that more quickly. If you would like to own SpaceX and the other mega IPOs that are expected later this year, you could certainly buy any of the major index funds that are linked to the NASAC 100. Those IPOs will also be going into other index funds. For example, Russell 1,000 index funds, you would not be able to access them through an S&P 500.

index fund. And that's a clear distinction that basically said they're doing this to protect the historical integrity of the process that determines which companies get added to the S&P 500. And the S&P 500 has always had criteria around profitability and the quality of a company's earnings. He says that people invested in index funds that are adding the mega IPO companies might find that they're overpaying. A lot of market analysts expect that in the first five to 15 trading days after the SpaceX IPO, the stock could really run up in anticipation of the forced buying by index funds. And a lot of people anticipate that that price run up might decline after that. We don't know that that's going to happen, but that certainly is the view of a lot of experienced people in the market.

Tech stocks sold off heavily today, reflecting just how nervous investors remain about the AI trade. As our what's news in markets host, Amani Moise explains, any sign of weakness can prompt a sell-off. We got a stronger than expected jobs report. That means that inflation could be a problem again. That makes the Fed less likely to cut interest rates. And the market has really been holding out hope for lower interest rates because that usually sends stocks higher. The other thing going on in the background is that, Chip stocks are having a bit of a reset after we've seen them have these meteoric rises so far this year. So Broadcom reported earnings earlier this week, and the company didn't raise its guidance like a lot of the chipmakers did before it. So investors are starting to question, well, how much more room do these chip stocks have to go?

The NASDAQ fell 4.2% today, its worst day of 2026, and for the week it sank 4.7%. It's worst week in more than a year. The S&P declined 2.6% today, which translates. to a loss of $1.8 trillion in market cap. Coming up, Ukraine pushes to revive peace talks with Russia. That and more after the break. Turning now to Washington, in an interview with the Wall Street Journal today, President Trump said he wants the incoming acting director of National Intelligence, Bill Pulte,

to begin firing a large number of employees as part of a shake-up of the U.S. intelligence community. Trump says the Office of the Director of National Intelligence, which oversees 18 federal intelligence agencies and units, is too big or just unnecessary. The president said that he hopes Pulte can make changes across the intelligence community before a permanent intelligence director is confirmed. Lawmakers on both sides of the aisle have sounded alarms this week about Pulte's appointment. They say Pulte doesn't have national security experience, and they're concerned he will use his position to target the president's perceived enemies and politicize the agency. Pulte didn't respond today to request for comment. There's backlash brewing about government spending, but not in the way you might think. In towns and cities across the U.S., watchdogs are blowing the whistle on how local officials use their government credit cards.

Like, for example, eight people who work for a small North Carolina city, racking up a $264 restaurant tab for stuffed flounder. WSJ reporter Scott Calvert found examples of this kind of thing all over the country. Hi, Scott. Hi. So the flounder situation, what are some other examples of stuff officials have spent money on that's making taxpayers freak out? There was beer can coolers in Daytona Beach, Costco groceries in Connecticut. And there's another community in North Carolina where somebody bought ammunition with their town credit cards.

That was $276. You've got the $33 a pop stuff founder entrees, you know, times eight. Individually, they're not, you know, they're not huge, but they add up. But I mean, state and local governments spend millions and even billions of dollars a year on all kinds of things. So why are people so upset about these small transactions? Well, I think it's because there is that relatability factor. I mean, when people are going to the grocery store now and they're seeing these high prices, they might skip on buying things that cost a lot.

And some of these same things are being, you know, purchased by these government officials using essentially their tax dollars. And it's also just this sense that some of these purchases, they just don't seem like something, that serves the public, right? There's not a government purpose for some of these things. For example, there was an auditor in Florida who felt a need to remind folks there that, you know, in most cases, you have to pay for your own food. This is the way it works in life. So I'm really curious what the aftermath or blowback of this has been. Have any officials been charged or fired over this? What they're flagging really ranges from what they would consider just wasteful spending, a little bit extravagant, right? Unnecessary all the way to allege criminal conduct. And there was one case in a little town in North Carolina where just last month, the former town manager was indicted on a felony embezzlement charge. He declined to comment when I reached out to him, so we'll have to see how that plays out. But some of this stuff, it can result in serious potential consequences.

That was WSJ reporter, Scott Calvert. Thanks, Scott. Thank you. You heard from us yesterday about Russian elites pessimism about the Ukraine war. With Kiev gaining momentum, Ukrainian President Volodemir Zelensky is seeking to revive peace talks, and he sent a letter to Russian President Vladimir Putin offering to meet and bring the fighting to an end. It's the first such letter from Zelensky to Putin since Russia's 2022 invasion. Speaking at a major economic forum in St. Petersburg today, Putin's answer was no.

Instead, he addressed Russian soldiers on the front line, telling them to keep fighting. And that's what's news for this week. Tomorrow you can look out for our weekly markets wrap up, What's News and Markets. Then on Sunday, we'll be discussing SpaceX. That's in What's News Sunday. And we'll be back with our regular show on Monday morning. Today's show is produced by Danny Lewis and Anthony Bansy with supervising producer Tali Arbell. Michael LaValle wrote our theme music.

Aisha El-Muslim is our development producer. Chris Zinsley is our deputy editor. And I'm Alex Osala. Have a great weekend and thanks for listening.