Nasdaq 100 slides 3.2% as yields hit risk assets

What changed: jobs data and rate-hike speculation

U.S. tech stocks fell sharply by midday Friday after a hotter-than-expected jobs report pushed investors to reassess the interest-rate outlook. The data revived speculation that the Federal Reserve may raise rates later this year, a shift that tends to hit long-duration, growth-heavy equities the hardest. Rising Treasury yields were central to the move, with traders positioning for tighter financial conditions than previously expected.

The market reaction was broad but uneven. Tech and other rate-sensitive segments bore the brunt of selling, while more value-oriented pockets showed relatively smaller declines. The risk-off tone also extended to smaller U.S. companies and digital assets, which typically struggle when yields rise and liquidity expectations tighten.

U.S. indices: tech leads the decline

By midday Friday, the Nasdaq 100 was down 3.2%, placing the index on track for its worst daily decline since October 2025. The drop was notable because it came as high-growth AI-linked stocks came under pressure amid higher rate expectations.

The S&P 500 fell 1.8%, showing that the sell-off extended beyond technology but remained concentrated in rate-sensitive areas. The Dow Jones Industrial Average slipped 0.8%, reflecting its lower exposure to technology stocks relative to broader market benchmarks. Small caps also weakened, with the Russell 2000 sliding about 2.6% as the yield backdrop worked against economically sensitive and higher-beta names.

The AI trade shows strain after “near-perfect” results

The pressure in growth stocks was amplified by a sharp drop in a key AI-related stock. The stock fell 12.6% on Thursday and was down over 7% on Friday, despite what was described as near-perfect results. The decline weighed on sentiment across the wider AI infrastructure complex, highlighting how quickly positioning can unwind when the market’s discount rate rises.

This pattern fits a familiar dynamic for investors. Even strong company results can fail to support valuations when yields rise, because future earnings are discounted more aggressively. As a result, sectors that had been leading market gains can become focal points of selling during rate-led drawdowns.

Midweek snapshot: record highs fade as yields surge

Earlier in the week, U.S. stocks had already shown sensitivity to stronger economic data and rising yields. At midday Wednesday, U.S. equities retreated from record highs as hotter-than-expected economic readings and a renewed surge in Treasury yields revived fears of a near-term rate hike.

The S&P 500 fell 0.6% to around 7,568, putting a nine-session winning streak at risk. The Nasdaq 100 dipped 0.5% to about 30,513, as the rise in yields weighed on major growth names. Small caps underperformed in that session as well, with the Russell 2000 down 1.2%.

Bitcoin extends losses as risk appetite weakens

Digital assets also reflected the risk-off mood. Bitcoin fell for a fourth straight session to $15,900 on Wednesday, a level last seen in late March. By Friday, Bitcoin was down 17% for the week, putting it on track for its worst weekly performance since November 2022, when the collapse of FTX triggered a broad sell-off across digital assets.

Separately, another market update noted Bitcoin slipping below $18,000 early Monday from about $12,000, before recovering to just under $10,000 later in the day. In a separate Friday update, Bitcoin was described as nearly falling below $10,000 before recovering to around $13,700, and still down 34% from an early-October peak near $126,000. These moves underscored how quickly crypto prices can swing when macro policy expectations shift.

Key data table: Wednesday’s U.S. index levels

The following index levels were reported for Wednesday’s midday trade:

India: Gift Nifty signals gap-down amid oil worries

The global risk-off tone had clear implications for Indian equities as well. Indian benchmark indices, the Sensex and Nifty 50, were expected to open sharply lower on Thursday, tracking steep losses in global markets amid concerns over surging crude oil prices. Rising crude was linked to escalating U.S.-Iran conflict risks, which added to investor caution.

Gift Nifty traded around 23,251, down nearly 525 points from its previous close, pointing to a gap-down start for the Nifty 50. The combination of higher oil prices and global equity volatility is particularly relevant for India because energy costs can affect inflation expectations and corporate margins.

Recent India moves: rally, reversal, and intraday swings

India’s market action over multiple sessions reflected the push and pull between domestic momentum and global headlines. On Wednesday, the Indian stock market extended its rally for a third consecutive session even as investors remained cautious over the ongoing U.S.-Iran war in the Middle East. The Sensex rose 633.29 points, or 0.83%, to close at 76,704.13, while the Nifty 50 gained 196.65 points, or 0.83%, to end at 23,777.80.

But in a separate session, Indian shares snapped a three-day winning streak as benchmarks slipped into the red, with the Nifty 50 settling at 25,643 (down 133 points) and the Sensex ending at 83,314 (down 504 points). The report described broad-based selling pressure, with all 30 Nifty stocks lower, and weakness spreading to IT, midcaps and banks.

Another market update showed sharp volatility on a Friday session: the Sensex opened at 79,658.99, down 356.91 points (0.45%), while the Nifty50 opened at 24,656.40, down 109.50 points (0.44%). Later, by 1:00 PM, the same update showed the Nifty50 up 0.71% at 24,655.15 and the Sensex up 0.61% at 79,595, reflecting a market that was attempting to stabilise after early weakness.

Market impact: what investors are reacting to

Across regions and asset classes, the immediate driver was a repricing of interest-rate expectations after stronger-than-expected U.S. jobs data. Higher yields typically pressure tech and high-growth stocks, which explains the outsized move in the Nasdaq 100 relative to the Dow.

At the same time, crude oil concerns linked to the U.S.-Iran conflict added another layer of risk for global markets, particularly for countries sensitive to energy prices. For Indian equities, that mix can influence sentiment quickly through futures pricing such as Gift Nifty, and through sector-level moves in rate- and oil-sensitive areas like banks, IT, and broader cyclicals.

Why it matters: a tighter macro filter for valuations

The week’s moves showed that markets are placing a tighter macro filter on valuations. Even strong company performance in the AI ecosystem did not prevent a steep two-day slide in a major stock tied to that theme. With yields moving higher, investors appear more focused on the cost of capital and the durability of earnings expectations.

For Indian investors, the key takeaway is the speed at which overseas rate expectations and commodity shocks can spill into local price action. Gap-down signals from Gift Nifty, sharp intraday reversals, and broad-based selling in some sessions all point to a market that is highly sensitive to global cues.

Conclusion

U.S. tech stocks and other risk assets sold off as a hotter jobs report pushed yields higher and revived Fed rate-hike speculation, while oil worries linked to the U.S.-Iran conflict added pressure to sentiment. In India, futures pointed to a gap-down start, even as recent sessions showed sharp swings between rallies and pullbacks. Investors will be watching upcoming economic data, Treasury yield moves, and developments around oil supply risks for the next clear directional signal.