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Wall Street ended sharply lower on Friday as chip stocks led a broad sell-off across U.S. equities. The Nasdaq posted its steepest one-day percentage drop since April 2025, while the S&P 500 snapped a nine-week winning run.
A stronger-than-expected May jobs report added pressure to the stock market. Investors reassessed the Federal Reserve’s rate path after labor data showed the U.S. economy added 172,000 jobs, more than double analyst expectations.
Selling pressure centered on semiconductor and other major technology stocks after weeks of strong gains. The Philadelphia SE Semiconductor Index dropped 10.3%, marking its steepest one-day fall since March 2020.
U.S.-traded chipmakers erased about $1.3 trillion in market value during Friday’s session. NVIDIA fell about 6.2%, while Micron, AMD, Intel, Broadcom, and Marvell posted deeper losses.
Broadcom remained under pressure after its quarterly report raised concerns that demand for its custom AI chips had missed high market expectations. Its shares fell 7.9% on Friday, bringing its two-day decline close to 20%.
Micron dropped 13%, while Marvell lost about 17%. AMD fell nearly 11%, and Nvidia shed more than $300 billion in market value.
The Labor Department’s May jobs report showed 172,000 new jobs, while the unemployment rate stayed at 4.3%. The data pointed to a steady labor market, but it also reduced hopes for near-term rate cuts.
Financial markets priced in a 42.7% chance of a Federal Reserve rate hike at the December meeting, according to CME’s FedWatch tool. Rising yields also added pressure to growth and technology shares.
“After the record run we've seen the last nine weeks in equities, specifically tech and semiconductors, the dam just broke today,” said Ryan Detrick, chief market strategist at Carson Group.
He added, “Obviously, the stronger-than-expected jobs report puts the Fed in a tough spot regarding any interest rate cut for the rest of the year.”
The Dow Jones Industrial Average fell 695.15 points, or 1.35%, to close at 50,866.78. The S&P 500 dropped 200.57 points, or 2.64%, to end at 7,383.74.
Meanwhile, the Nasdaq Composite lost 1,121.53 points, or 4.18%, to close at 25,709.43. The move marked the index’s sharpest one-day percentage loss since April 2025.
Technology stocks dropped 5.8%, making the sector the weakest performer in the S&P 500. Consumer staples led the session’s gainers as investors moved toward defensive areas.
The S&P 500 ended its nine-week run of Friday-to-Friday gains. That streak had been its longest since one that ended in December 2023.
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Market breadth also showed broad pressure. Declining stocks outnumbered advancers by a 3.14-to-1 ratio on the New York Stock Exchange. On the Nasdaq, decliners beat advancers by a 3.48-to-1 ratio.
Trading volume reached 22.89 billion shares across U.S. exchanges, above the 20.29 billion average over the previous 20 sessions. The S&P 500 posted 14 new 52-week highs and three new lows.
Several non-chip stocks also moved sharply. Lululemon Athletica fell 8.6% after cutting its annual profit forecast and issuing weak second-quarter earnings guidance. Cooper Companies rose 8.6% after beating second-quarter estimates.
Crypto-linked stocks also declined as bitcoin fell 4.1%. Coinbase dropped 7.1%, while Strategy lost 6.9%.
However, some analysts framed the chip sell-off as a reaction to crowded positioning rather than a full break in the sector’s trend. “The semiconductor sector was way overbought. That's why we're seeing the sell-off. I don't think it's the end of the semi bull market,” said Ohsung Kwon, chief equity strategist at Wells Fargo.
Dennis Dick, a proprietary trader at Triple D Trading, also pointed to a shift in market behavior. “You've had a lot of people here that were just blindly buying the dip,” he said. “Blindly buying the dip had been winning you money, but that ended today.”
