A stronger-than-expected May jobs report rattled equity markets Friday afternoon, dragging down shares across technology and telecommunications sectors.
The U.S. economy added 172,000 nonfarm payroll jobs in May, significantly surpassing economists’ expectations of around 85,000, while the unemployment rate held steady at 4.3%.
That robust labor market data reduces the likelihood of near-term interest rate cuts by the Federal Reserve, reviving fears of a prolonged high-interest-rate environment.
A higher-for-longer rate scenario pressures growth-oriented stocks by making future earnings less valuable in present-day calculations, prompting investors to recalibrate their positions.
Applied Digital (NASDAQ: APLD), the enterprise networking company, fell 11.9% in afternoon trading, extending what has been a turbulent stretch for the stock.
Applied Digital’s shares have recorded 93 moves greater than 5% over the last year, though Friday’s decline stands out as particularly significant given its scale.
Just two days prior, the stock dropped 4.7% after rising oil prices, higher Treasury yields, and shifting rate expectations tightened the macro backdrop for corporate clients.
ADP’s May payroll print, which showed 122,000 jobs added against a consensus estimate of 110,000, confirmed the labor market remains firm while pushing rate hike expectations higher.
GitLab’s announcement that it would cut approximately 14% of its workforce and exit 22 countries added further pressure, signaling that enterprise clients continue to manage costs tightly even amid a broader market recovery.
Applied Digital is up 37.3% since the beginning of the year, but at $38.59 per share, it remains 22.3% below its 52-week high of $49.65 reached in May 2026.
Investors who bought $1,000 worth of Applied Digital shares five years ago would now be looking at an investment worth $6,631, reflecting the company’s significant long-term growth trajectory.
Terrestrial telecommunications company Lumen (NYSE: LUMN) fell 9.1%, as higher interest rates weigh heavily on capital-intensive telecom businesses reliant on debt financing.
Satellite telecommunications company Iridium (NASDAQ: IRDM) declined 9.6%, with rate-sensitive growth expectations across the broader communications sector contributing to the selloff.
In sectors where corporate spending depends heavily on client confidence, a higher-for-longer rate environment combined with ongoing geopolitical uncertainty creates a direct and persistent headwind.
