Nasdaq slumps over 3% in biggest drop since October as chip stocks sink

US stocks tumbled on Friday, June 5, led by a sharp sell-off in technology and semiconductor shares after a stronger-than-expected May jobs report fueled concerns that the Federal Reserve may keep interest rates higher for longer.

The Nasdaq Composite plunged more than 3%, putting it on track for its steepest single-day decline since October 10, 2025, while the Nasdaq 100 extended losses to 3.4%. The S&P 500 fell about 1.6%, snapping its nine-week winning streak, while the Dow Jones Industrial Average dropped more than 350 points.

Technology stocks were on course for their worst day since April 2025, with chipmakers and large-cap tech names bearing the brunt of the selling pressure as Treasury yields surged following the jobs data. The broad-based market sell-off erased more than $2.5 trillion in value across major asset classes over the past 24 hours.

Alongside equities, gold fell over 3%, silver tumbled nearly 7%, and Bitcoin dropped more than 6%, slipping below the $60,000 mark for the first time since October 2024, as investors reassessed expectations for monetary policy.

S&P 500, Nasdaq fall as strong jobs data lifts Treasury yields

US stocks declined on Friday, June 5, with the S&P 500 and Nasdaq weighed down by a sharp sell-off in semiconductor shares and a jump in Treasury yields after a stronger-than-expected jobs report reinforced expectations that the Federal Reserve could keep monetary policy tighter for longer.

The S&P 500 fell 0.6%, while the Nasdaq Composite dropped 1.1%, dragged lower by weakness in chipmakers. The Dow Jones Industrial Average was little changed in early trade.

Investor sentiment took a hit after data from the US Bureau of Labor Statistics showed nonfarm payrolls increased by 172,000 in May, comfortably ahead of economists' expectations of around 80,000-88,000 jobs. The unemployment rate remained unchanged at 4.3%, in line with forecasts.

The robust labour market data prompted a rise in Treasury yields as traders pared expectations of near-term Federal Reserve rate cuts and increased bets that policymakers could maintain a restrictive stance for longer. The benchmark 10-year Treasury yield climbed above 4.5%, while the 30-year yield rose past 5%.

Technology stocks bore the brunt of the sell-off, led by semiconductor names. Broadcom shares fell about 3%, extending losses after plunging more than 12% in the previous session following its earnings report. Marvell Technology dropped over 6%, while Micron Technology declined around 5%.

The stronger-than-expected employment figures underscored the resilience of the US economy, but also reignited concerns that persistent labour market strength and elevated inflation could delay any policy easing by the Federal Reserve.

Markets are now closely watching upcoming inflation readings and Fed commentary for further clues on the path of interest rates through the remainder of the year.