Nall Street’s nine-week
winning streak ended with a thud on Friday, as red-hot
technology stocks suffered their largest daily decline since
April 2025 after a hot May jobs report fueled fears of a hawkish
policy pivot from the U.S. Federal Reserve.
Selling was concentrated among chip stocks and other
technology favorites that have surged higher in recent weeks as
the Nasdaq Composite Index and S&P 500 rose
repeatedly to fresh highs.
All three major U.S. stock indexes closed sharply lower,
with plunging chip stocks dragging the tech-laden Nasdaq down by
its largest one-day percentage loss since April 2025.
The Philadelphia SE Semiconductor Index suffered its
largest one-day percentage plunge since March 2020, erasing more
than $1 trillion in stock market value.
The S&P 500 ended its nine-week run of Friday-to-Friday
gains, its longest weekly winning streak since one that ended in
December 2023.
“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 in Omaha. “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. And the market is throwing a
fit by hitting the big winners so far this year.”
Rising interest rates and the Iran war weighed on sentiment
heading into the weekend, but many investors said they expected
tech stocks to continue rallying.
“The market reaction today was more driven by positioning
rather than fundamentals,” said Ohsung Kwon, chief equity
strategist at Wells Fargo. “The semiconductor sector was way
overbought. That’s why we’re seeing the selloff. I don’t think
it’s the end of the semi bull market.”
The U.S. economy added 172,000 jobs in May, according to the
Labor Department, more than double analyst expectations, while
the unemployment rate held firm at 4.3%. The robust report was
double-edged: it provided reassurance of U.S. economic health,
but all but killed any hopes of an interest rate cut from the
Fed in the near future.
Financial markets are pricing in a 42.7% likelihood of a
rate hike at the conclusion of the Fed’s December meeting,
according to CME’s FedWatch tool.
Fading hopes for a near-term resolution to the Middle East
war and reopening the Strait of Hormuz are stirring fears that
energy price pressures could morph into wider, systemic
inflation.
Iran reaffirmed its support for Hezbollah and demanded that
Israel withdraw its troops from southern Lebanon, further
complicating efforts to secure a near-term peace deal that would
include the resumption of traffic through the crucial strait.
U.S. President Donald Trump’s administration has negotiated
three truces, and while fighting has been greatly reduced, the
two sides continue to trade airstrikes.
The Dow Jones Industrial Average fell 695.15 points,
or 1.35%, to 50,866.78, the S&P 500 shed 200.57 points,
or 2.64%, to 7,383.74 and the Nasdaq Composite lost
1,121.53 points, or 4.18%, to 25,709.43.
Among the 11 S&P 500 sectors, tech plunged 5.8%, while
consumer staples led the percentage gainers.
Nvidia, the largest company by market value, lost
6.2%, while Intel, Micron, AMD and
Broadcom slid between 7.9% and 13.3%.
Lululemon Athletica slumped 8.6% after the athletic
apparel maker cut its annual profit forecast and projected
second-quarter earnings well below Wall Street estimates.
Cooper Companies rose 8.6% after the contact lens maker
beat estimates for second-quarter results.
Cryptocurrency firms Coinbase and Strategy
fell 7.1% and 6.9%, respectively, weighed by bitcoin’s
4.1% drop.
S&P Global said it would not change the eligibility requirements
for its major indices, which effectively rules out a swift entry
for Elon Musk’s SpaceX to the benchmark S&P 500 after it goes
public in what would be the world’s biggest initial public
offering.
S&P Dow Jones Indices will announce the results following
its rebalancing after markets close. Chipmaker Marvell
Technology, which boasts over $270 billion in
valuation, is among the contenders to be added to the benchmark
index.
Declining issues outnumbered advancers by a 3.14-to-1 ratio
on the NYSE. There were 132 new highs and 249 new lows on the
NYSE.
On the Nasdaq, 1,074 stocks rose and 3,737 fell as declining
issues outnumbered advancers by a 3.48-to-1 ratio.
The S&P 500 posted 14 new 52-week highs and three new lows
while the Nasdaq Composite recorded 83 new highs and 178 new
lows.
Volume on U.S. exchanges was 22.89 billion shares, compared
with the 20.29 billion average for the full session over the
last 20 trading days.