US Stock Markets This Week: Wall Street’s remarkable nine-week winning streak came to an abrupt end on Friday as a sharp selloff in technology stocks triggered the biggest one-day decline in the Nasdaq since April 2025. Investors rushed to lock in profits after a stronger-than-expected US jobs report reignited concerns that the could keep interest rates elevated for longer, even as geopolitical tensions in the Middle East and rising oil prices added to market uncertainty.
The S&P 500 snapped its longest weekly winning streak since December 2023, while all three major US indices finished the week in negative territory. Selling was concentrated in semiconductor and artificial intelligence-linked stocks that had led the market higher in recent months, pushing both the Nasdaq Composite and S&P 500 to record highs before the latest pullback.
For the week, the S&P 500 declined more than 2.6%, its first negative weekly performance in 10 weeks. The Nasdaq tumbled 4.5%, while the Dow posted a modest weekly loss.
Just on Friday, the Nasdaq plunged 4.77% to close at 28,957.60, marking its steepest one-day decline since April 2025. The S&P 500 fell 2.64% to 7,383.74, while the Dow Jones Industrial Average dropped 695.15 points, or 1.35%, to end at 50,866.78.
Hot Jobs Data, Rising Yields and Middle East Tensions Trigger Selloff
Investor sentiment deteriorated after the US Bureau of Labor Statistics reported that nonfarm payrolls increased by 172,000 in May, significantly above economists’ expectations of 80,000 jobs. The stronger labour market data fuelled concerns that the Federal Reserve may delay interest-rate cuts or even consider further tightening if inflation remains persistent.
The reaction was swift in bond markets. The on the benchmark 10-year US Treasury climbed above 4.5%, while the 30-year Treasury yield rose beyond 5%, levels that renewed worries about higher borrowing costs and their impact on corporate earnings, particularly for companies driving the artificial intelligence boom.
Although a strong labour market is generally viewed as a positive sign for the economy, investors feared that resilient employment conditions could reduce the urgency for the Federal Reserve to ease monetary policy.
The bore the brunt of the selloff. Nvidia, the world’s most valuable company by market capitalisation, slumped 6.2%. Intel, Micron Technology, AMD and Broadcom dropped between 7.9% and 13.3%.
Broadcom’s decline followed disappointment over the company’s failure to raise its outlook for artificial intelligence chip demand earlier in the week. While weakness had already emerged on Thursday, Friday’s selloff intensified dramatically as investors reassessed valuations across the sector.
Beyond interest-rate concerns, investors also remained focused on geopolitical developments. Hopes for a near-term resolution to the Middle East conflict faded after Iran reaffirmed support for Hezbollah and demanded a full Israeli withdrawal from southern Lebanon. The developments complicated efforts to secure a broader peace agreement and reopen shipping routes through the Strait of Hormuz.
The prolonged conflict has kept elevated, raising fears that energy-driven inflation could spread across the broader economy. While fighting has eased following multiple ceasefire efforts by the Trump administration, both sides continue to exchange airstrikes, leaving markets wary of further disruptions.
Despite Friday’s sharp decline, investors largely viewed the move as a rotation away from richly valued technology stocks rather than the beginning of a broader market panic. Many investment funds reduced exposure to AI and semiconductor companies after a powerful multi-year rally, amid growing concerns that valuations may have become stretched.
US President criticised the market’s reaction to the jobs report, arguing that investors were placing too much emphasis on inflation concerns.
For now, Wall Street faces a delicate balancing act between strong economic data, rising bond yields, persistent inflation pressures and geopolitical uncertainty — factors that could determine whether the recent tech-led rally quickly resumes or faces a deeper correction.
(with inputs from agencies)