Key Takeaways
- The S&P 500 (SPY) plummeted 2.5% on Friday, led by a sharp sell-off in technology and semiconductor shares following a stronger-than-expected jobs report.
- SpaceX ([PRIVATE:SPACEX]) entered a massive $920 million per month cloud services pact with Google (GOOGL), a deal that includes the deployment of 110,000 Nvidia (NVDA) GPUs.
- Spot gold erased all of its 2026 gains, falling over 3% to its lowest level since January as robust labor data fueled bets that the Federal Reserve may hike interest rates.
- U.S. Consumer Credit rose by $20.733 billion in April, significantly beating economist estimates of $17.670 billion, driven by a 10.4% surge in revolving credit.
- New U.S. tariff guidance was issued for aluminum, steel, and copper, introducing targeted reductions for certain manufacturing sectors while adding new derivative categories.
Tech Sell-Off Drags Markets Lower
U.S. equity markets faced intense selling pressure on Friday as the S&P 500 (SPY) extended its drop to 2.5%. The downturn was primarily driven by a rotation out of high-flying technology stocks and disappointing earnings guidance from major chipmakers earlier in the week.
Market sentiment soured further after the May nonfarm payrolls report showed the economy added 172,000 jobs, nearly double the forecasted 85,000. This "blowout" data has led traders to price in a higher probability of a Federal Reserve interest rate hike before the end of the year, sending Treasury yields higher and weighing on growth-oriented assets.
SpaceX and Google Ink Historic Cloud Deal
In a landmark agreement, SpaceX ([PRIVATE:SPACEX]) has committed to a $920 million per month cloud services contract with Google (GOOGL). The deal, set to run from October 2026 through June 2029, provides SpaceX with massive compute capacity, including 110,000 Nvidia (NVDA) GPUs, CPUs, and memory.
Under the terms of the agreement, Google will retain ownership of the AI models and related data generated through the partnership. Notably, the contract includes a performance clause stating that if SpaceX cannot deliver the required GPUs by September, Google maintains the right to terminate the deal. This partnership comes just ahead of SpaceX’s highly anticipated initial public offering, rumored for June 12 at a $1.8 trillion valuation.
Commodities and Macroeconomic Data
The commodities market saw significant volatility as Spot Gold plummeted, erasing its year-to-date gains. The precious metal fell as much as 3.4% to $4,320 per ounce, pressured by a strengthening U.S. Dollar and rising real yields. Meanwhile, Brent Crude futures settled down 2.04% at $93.09 per barrel, despite ongoing geopolitical tensions in the Middle East.
On the domestic front, the Federal Reserve reported that U.S. Consumer Credit increased by $20.733 billion in April. The growth was characterized by a sharp 10.4% rise in revolving credit, such as credit cards, suggesting that consumers are increasingly relying on debt to manage persistent inflationary pressures.
Trade and Geopolitics
The White House released updated guidance on Section 232 tariff regimes for aluminum, steel, and copper. The new proclamation provides targeted tariff reductions for agricultural machinery and residential HVAC systems but expands coverage to include aluminum lithographic plates and steel racks.
In foreign policy, President Donald Trump remarked that the situation in Iran "seems to be going quite well," despite reports that Hezbollah has rejected recent ceasefire proposals. The administration continues to push for a regional non-aggression pact as part of its broader "America First" diplomatic strategy.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.