The major averages pulled back on Friday as investors digested a stronger-than-expected jobs report and its implication for monetary policy going forward. The Dow Jones Industrial Average fell 349 points, or 1%. The S&P 500 slipped 68 points or 1.6%. The technology-heavy Nasdaq Composite fell 304 points or 2.4%.

Hiring in the U.S. remained elevated in May. Nonfarm payrolls added 390,000 jobs last month, the Bureau of Labor Statistics reported Friday. Economists expected 328,000 jobs added, according to Dow Jones.

Average hourly earnings rose 0.3% in May, according to the BLS, slightly less than the consensus estimate of 0.4% and in line with April's pace.

Traders selling stocks likely reacted to the move higher in rates with fears of the Federal Reserve tightening monetary policy at the forefront. The benchmark 10-year Treasury yield climbed after the report, above the 2.96% level.

Cleveland Fed President Loretta Mester later Friday said she supports aggressive rate hikes ahead, as she has not seen enough evidence that inflation has peaked.

Investors fear higher rates could slow the economy too much and tip it into a recession. Higher yields also discount the value of future earnings, which can make stocks look less attractive, especially growth and tech names.

Technology shares retreated amid the rising rates. Micron Technology fell about 7%, and Nvidia lost roughly 3%. Mega-cap tech names Google-parent Alphabet and Meta Platforms each lost about 3%.

Apple eased around 3% after a cautious research note from Morgan Stanley. The firm said slowing App Store growth could hurt the company in the near-term.

Tesla shares fell more than 8% after Reuters reported, citing an internal email, that CEO Elon Musk wants to cut 10% of jobs at the car maker. According to Reuters' report, Musk also said in the email that he has a "super bad" feeling about the economy.

The comments from Musk come after other warnings from bellwether companies this week. JPMorgan Chase CEO Jamie Dimon on Wednesday said he expects an economic "hurricane" ahead amid the war in Ukraine and the Fed's tightening regime. On Thursday, Microsoft cut its earnings and revenue guidance for the fiscal fourth quarter, citing unfavorable foreign exchange rates.

With Friday's decline, the three major averages are each now about 1% lower on the holiday-shortened week. The weekly decline comes in spite of a strong session Thursday.