Nasdaq Sees Sharpest Drop In More Than a Year Amid Selloff In Chip Stocks
Stocks plunged on Friday amid a broad selloff in chip stocks and rising Treasury yields that followed a stronger-than-expected jobs report.
The Nasdaq Composite dropped more than 4%, its largest drop since April last year. The S&P 500 fell 2.64%, while the Dow Jones Industrial Average dropped 1.35%.
Broadcom shares fell by more than 6% on the session after already dropping 12% on Thursday. Marvell Technology and Micron Technology fell 12% and 11%, respectively.
Anshul Sharma, chief investment officer at Savvy Wealth, said “this is a bit of profit taking.” “The AI narrative still remains intact, but I do think that the expectations got more elevated than they thought, and I think even relatively good news can end up disappointing when it’s not as high as where the expectations are.”
Treasury yields also climbed after job growth surged beyond expectations in May, according to new data from the Bureau of Labor Statistics.
Concretely, nonfarm payrolls climbed 172,000 last month, more than twice the figure expected by the Dow Jones consensus. April’s figure was revised upwards to 179,000.
The unemployment rate stood at 4.3%, in line with expectations. “Among the major worker groups, the unemployment rates showed little or no change in May for adult men (4.0 percent), adult women (3.8 percent), teenagers (14.7 percent), and people who are White (3.8 percent), Black (6.6 percent), Asian (3.8 percent), or Hispanic (5.0 percent),” the report noted.
Average hourly earnings climbed 0.3% compared to the previous month and 3.4% in an inter-annual basis, also in line with expectations. Inflation stood at 3.8% in April, largely as a result of energy-related spikes resulting from the war in Iran, meaning that wage growth is lagging price increases.
The report could increase the chances of an interest rate hike this year by the Federal Reserve, according to market observers.
CME’s FedWatch increased chances of a rate hike by the end of December at almost 70%, compared to 52% before the latest figures. The market still expects rates to remain steady at the 3.50%-3.75% range after the June meeting.
Cryptocurrencies also plunged, with Bitcoin and Ethereum extending their sharp declines this week, capping one of the cryptocurrency market’s most difficult stretches in recent years as investors pulled billions of dollars from crypto investment products and reduced exposure to risk assets.
Bitcoin fell roughly 15% during the first week of June, dropping below $63,000, while Ethereum slid to its lowest level since April 2025. The declines came amid heavy selling across digital assets, with the broader cryptocurrency market also recording significant losses. According to The Economic Times, Bitcoin’s retreat has erased a substantial portion of the gains recorded earlier in the year, while Ethereum faced additional pressure from weakening institutional demand.
