Key facts
- Tech stocks experienced their worst week in a year, with the Nasdaq Composite down 4.18% on Friday.
- A strong jobs report showing 172,000 jobs added in May shattered expectations for Fed rate cuts.
- The PHLX Semiconductor Index fell over 10%, and chipmakers lost an estimated $1.3 trillion in market value.
- Nvidia, Micron, Marvell, and AMD saw significant declines.
- The 10-year Treasury yield rose to 4.55%, and the probability of a Fed rate hike by December increased to 67%.
- Bitcoin dropped below $60,000.
Tech stocks experienced one of their worst weeks of the year, with the Nasdaq Composite plunging 4.18% on Friday, marking its steepest single-day decline since April 2025. The sell-off was triggered by a blowout jobs report that added 172,000 jobs in May, significantly exceeding economists' expectations and shattering market hopes for Federal Reserve rate cuts. This led to a surge in the 10-year Treasury yield to 4.55% and increased the probability of a Fed rate hike by December to 67%.
Semiconductor stocks were particularly hard-hit, with the PHLX Semiconductor Index plummeting over 10% and chipmakers losing an estimated $1.3 trillion in market value on Friday alone. Major chip companies such as Nvidia, Micron, Marvell, and AMD saw substantial drops, with Nvidia alone shedding over $300 billion from its market capitalization. Broadcom extended a two-day slide to nearly 20% following weak guidance.
The broader tech sector also suffered, as the "Magnificent Seven" tech giants all traded lower. Tesla and Nvidia each fell over 6%, while Meta dropped 5% amid reports of potential equity raises to fund AI infrastructure. Alphabet had already raised $85 billion earlier in the week.
Bitcoin also tumbled, falling below $60,000 for the first time since October 2024, with crypto-related stocks experiencing declines between 6.5% and 11%. Analysts suggested the market sell-off was driven by positioning and an overbought semiconductor sector, rather than fundamental issues, following a prolonged rally.