Wall Street ended the week with significant losses as stronger-than-expected jobs data pushed Treasury yields higher, leading to a selloff in chip stocks. On Friday (June 5), the tech-heavy Nasdaq plunged 4%, marking its biggest decline since early 2025. At the closing bell, the Dow Jones Industrial Average fell 695 points to 50,866, while the S&P 500 dropped 200 points to 7,383. The Nasdaq closed at 25,709, down 1,121 points.

The downturn was driven by a major selloff in chip stocks, with U.S.-traded chipmakers losing over $1 trillion in market value. Companies like Nvidia, Micron Technology, and Advanced Micro Devices were among the hardest hit, following a weak report from Broadcom earlier this week, as reported by Reuters.

The selloff was exacerbated by the release of a stronger-than-expected U.S. jobs report, which showed the economy added 172,000 jobs in May, well above expectations. This fueled concerns that the Federal Reserve might maintain a hawkish stance, leading investors to reduce exposure to growth stocks, according to Proactive Investors.

Technology shares bore the brunt of the selling, with the S&P Technology Select Sector Index plunging 6.7%. AI-related stocks were among the biggest casualties, with Nvidia falling 6% as investors questioned valuations in the semiconductor and AI sectors.

Beyond equities, Treasury yields surged, pushing the benchmark 10-year yield above 4.5%, while the U.S. dollar climbed to an eight-week high. Gold fell roughly 2% as rising yields reduced the appeal of non-yielding assets, and Bitcoin slid to around $62,000, its lowest level since February.

The strong jobs data has complicated matters for the Federal Reserve, with analysts noting that the report neutralizes the case for near-term rate cuts. The probability of a Fed rate increase by year-end remains below 40%, as reported by Charles Schwab.

Simon Conway