Traders Sell Chipmakers as Rising Yields Fuel US Stock Market Decline

Market Turmoil: Wall Street Sells Off Tech Shares Amid Rising Bond Yields

The Wall Street rally came to an abrupt end on Friday, as investors offloaded semiconductor companies and other high-flying technology shares in response to rising bond yields. The S&P 500 Index slid 1.2% in New York, while the Nasdaq 100 Index sank 1.5%, marking their worst day since late March. Chipmakers led the broad-based decline in equity markets, with the Philadelphia Stock Exchange Semiconductor Index tumbling 4.0%.

Notable decliners included Nvidia Corp., which fell 4.4%, Intel Corp., which shed 6.2%, and Broadcom Inc., which lost 3.3%. The year-to-date strength in the group made these shares a natural place for cautious investors to take profits. The rout came as investors around the globe offloaded government bonds, sending borrowing costs higher from Japan to the US after a series of hot inflation prints stoked concern about the prospect of central banks having to raise interest rates this year.

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The yield on 10-year Treasuries hovered near 4.60%, a level that is causing investors to take some chips off the table in the stock market after the enormous six-week run. This week's inflation numbers and the renewed rise in crude oil are raising fears about inflation, which is leading investors to reassess their portfolios.

Bank of America Corp. strategists led by Michael Hartnett said the stock market is primed for profit-taking due to investors crowding into equities and rising inflation risks. Growing price pressures are beginning to permeate the US economy at a time when the market is soaring to record highs, he said in a note to clients. A similar view was echoed at Barclays Plc, where the in-house market-timing indicator is flashing a sell signal for the S&P 500 - the first such event since February 2025.

Market pressures are compounding an already difficult environment for stock pickers. Active managers who briefly looked like they might finally have their moment earlier this year are once again confronting a familiar problem: a stock rally driven by a tiny group of tech megacaps that diversified portfolios simply can't keep up with. The share of mutual funds outperforming the S&P 500 this year has plunged to just 28%, according to the latest data from Barclays, down from over 60% at the end of February.

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The reversal has been so sharp that active managers are now headed for their fourth-worst showing in the last 20 years relative to the benchmark, the data show. That's an ominous turn for an industry already on the defensive after investors yanked roughly $1 trillion from active equity mutual funds last year alone.

On the geopolitical front, US President Donald Trump said he didn't discuss a possible extension of his tariff truce when he met with Chinese leader Xi Jinping during a summit in China. President Trump also said that he didn't push his Chinese counterpart to pressure Iran to open the Strait of Hormuz.

President Trump's latest financial disclosures show that he or his investment advisers made more than 3,700 trades in the first quarter, a flurry totaling tens of millions of dollars and involving major companies that have dealings with his administration. In individual company news, Pershing Square Chief Executive Officer Bill Ackman said he's taken a new stake in Microsoft Corp. after shares declined, saying investors have underestimated the durability of the company's software. Meantime, China agreed to buy 200 Boeing Co. planes, President Trump said, falling short of the 500 737 Max and additional widebody aircraft Chinese airlines were expected to buy.