What Happened?
A number of stocks fell in the afternoon session after a stronger-than-expected jobs report signaled that the Federal Reserve may keep interest rates higher for longer.
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%. This robust labor market data eases concerns of an economic slowdown but diminishes the likelihood of near-term interest rate cuts by the Federal Reserve.
A prolonged high-interest-rate environment can create headwinds for growth-oriented sectors like technology, as it pressures stock valuations by making future earnings less valuable in the present. As a result, investors recalibrated their expectations for a 'higher-for-longer' rate scenario.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Video Conferencing company 8x8 (NASDAQ: EGHT) fell 5.8%. Is now the time to buy 8x8? Access our full analysis report here, it’s free.
- Video Conferencing company RingCentral (NYSE: RNG) fell 6.2%. Is now the time to buy RingCentral? Access our full analysis report here, it’s free.
- E-commerce Software company Shopify (NASDAQ: SHOP) fell 5.2%. Is now the time to buy Shopify? Access our full analysis report here, it’s free.
Zooming In On RingCentral (RNG)
RingCentral’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 5.7% on the news that investors took profits following a significant rally the previous day.
Software stocks pulled back after one of the sharpest sector recoveries on record. The iShares Expanded Tech-Software ETF gained 15% across the prior three sessions — its best such run ever — while ServiceNow completed a nearly 40% rally in just four sessions from its April lows. With gains of that magnitude in that timeframe, profit-taking is the natural response. The S&P 500 software and services sector fell approximately 3.78% on the day.
Critically, the broader market provided no significant selling pressure as the S&P 500 was essentially flat, the Nasdaq barely changed, and the Dow edged marginally higher. This was sector-level digestion, not a broad risk-off move. Salesforce surrendered nearly half of the previous day's 10%-plus surge as worries about Anthropic's upcoming IPO and Google's $80 billion equity raise added pressure to the rerating.
CrowdStrike slipped as pre-earnings caution set in ahead of the June 3 print — the stock rose approximately 70% year-to-date as options markets priced in a 9.5% swing on the result. The sector's underlying thesis remained intact: the SaaSpocalypse narrative broke, and many names continued to trade well below their 52-week highs. The pullback was the market catching its breath before the next round of data, not reversing course.
RingCentral is up 49.2% since the beginning of the year, but at $41.16 per share, it is still trading 16.2% below its 52-week high of $49.10 from May 2026. Despite the year-to-date gain, investors who bought $1,000 worth of RingCentral’s shares 5 years ago would now be looking at only $162.59.
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