US Stock Markets Experience Selloff: S&P 500 Declines 2.6%, Nasdaq Plunges 4.5% Amid Tech Sector Downturn

US Stock Markets Experience Sharp Decline in Week-Long Selloff

The nine-week winning streak on Wall Street 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. The Nasdaq Composite plummeted 4.77% to close at 28,957.60, marking its steepest one-day decline since April 2025. This decline was a result of investors rushing to lock in profits after a stronger-than-expected US jobs report reignited concerns that the Federal Reserve could keep interest rates elevated for longer. The selloff was also fueled by geopolitical tensions in the Middle East and rising oil prices, which 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. 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. The Dow Jones Industrial Average dropped 695.15 points, or 1.35%, to end at 50,866.78.

The stronger-than-expected US jobs report, which showed nonfarm payrolls increased by 172,000 in May, significantly above economists' expectations of 80,000 jobs, fueled 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, with the yield on the benchmark 10-year US Treasury climbing above 4.5%, while the 30-year Treasury yield rose beyond 5%. This renewed worries about higher borrowing costs and their impact on corporate earnings, particularly for companies driving the artificial intelligence boom.

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The technology sector bore the brunt of the selloff, with Nvidia, Intel, Micron Technology, AMD, and Broadcom dropping between 6.2% 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. The prolonged conflict in the Middle East has kept oil prices elevated, raising fears that energy-driven inflation could spread across the broader economy.

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.