Friday proved brutal across nearly all financial markets despite one piece of upbeat economic news: the U.S. reported its strongest jobs gains in a year and a half. That surprising contrast left traders and investors re-evaluating risk and sparked broad selling across assets.
Analysts at the Kobeissi Letter broke down the sequence of events and why markets responded so harshly to what on the surface looked like positive data.
What Exactly Happened?
In crypto, the collapse was dramatic. Bitcoin plunged to $59,100 for the first time since November 2024, dragging nearly the entire altcoin market lower and triggering over $1.7 billion in liquidations at one point. But this was not a crypto-only event.
Gold, usually considered a safe haven, fell more than 4% in a single day, sliding from above $4,500 to about $4,315. U.S. equities suffered as well: the S&P 500 erased roughly $2 trillion in market capitalization in one session, and the Nasdaq 100 printed seven straight hourly red candles—its worst sequence of declines since the market swing more than a year earlier.
Most of these losses came after the U.S. jobs report was released. The report was very strong—the best payroll performance in 18 months—yet markets reacted with a widespread sell-off, a reaction that puzzled many observers.
So Why the Sell-Off?
Paradoxically, strong jobs data can be negative for risk assets. Several analysts pointed to the link between labor market strength and central bank policy expectations.
“Strong jobs data kills the rate cut narrative. Bitcoin, already down 15% and sitting on uncleared leveraged longs, has no macro catalyst to recover into, and Middle East tensions are keeping risk appetite soft across markets,” said analysts at Nansen.
The Kobeissi Letter made a similar point: when the Federal Reserve began cutting rates in 2025, it did so largely because the labor market had weakened, not because inflation had decisively returned to the Fed’s 2% target. That history matters now.
With inflation pressures rising again amid geopolitical tensions in the Middle East, bond markets had been clinging to hopes that labor weakness would compel the Fed to ease policy. Friday’s robust jobs report reversed that narrative and cast doubt on the notion that the labor market would remain weak.
The report showed a sharp rise in job openings—over 730,000 additional positions in April—far above expectations of little or no change. Total available employment climbed to 7.6 million for the month, the highest level in two years. Those details intensified concerns that interest-rate cuts are less likely in the near term.
In short, markets experienced what analysts called the most hawkish shift in Fed expectations since the post-pandemic stimulus era. Where investors had been pricing in as many as four rate cuts earlier in the year, they are now increasingly assessing the possibility of higher rates into early 2026.
Adding even more fuel to the fire is the drawdown in crypto, with Bitcoin now down -53% since October.
In fact, Bitcoin is down 20% this week ALONE, with crypto erasing ~$2.5 trillion since October 2025.
The bear market gained momentum this week and crushed risk appetite. pic.twitter.com/48WL0tsjqv
— The Kobeissi Letter (@KobeissiLetter) June 5, 2026
Other factors likely amplified the sell-off. Reports that Meta is considering raising “tens of billions of dollars” through a stock offering to fund artificial intelligence development raised investor concern that major tech firms could flood markets with equity offerings to finance AI initiatives. Large anticipated offerings can prompt portfolio rebalancing or selling ahead of issuance.
SpaceX’s much-anticipated IPO, scheduled for June 12, may have contributed too, as funds potentially liquidated positions to create capacity for that major allocation.
“Sum it all up, and the market, which was up more than 20% over two months, was overdue for today’s decline,” the Kobeissi Letter analysts concluded.
Overall, the combination of surprisingly strong employment data, shifting Fed expectations, geopolitical pressures, and large potential capital raises from major companies created a perfect storm that hurt both risk and traditional safe-haven assets in a single volatile session.