Wall Street selloff 2026: Nasdaq -4% as chips plunge

Why Wall Street fell on June 5

Wall Street closed sharply lower on Friday, June 5, as investors sold technology shares and reassessed the outlook for U.S. interest rates after a stronger-than-expected employment report. The selloff was led by semiconductors, with chip stocks suffering their steepest daily drop since the earlier “Liberation Day” tariff rout referenced in market coverage. The move hit the Nasdaq the hardest, reflecting heavy exposure to large-cap tech and AI-linked names. Traders also reacted to rising Treasury yields, which tend to pressure high-valuation growth stocks. By the end of the session, the decline had also snapped a long run of weekly gains for the S&P 500.

The jobs report that reshaped rate expectations

The U.S. Labour Department reported that employers added 172,000 jobs in May, roughly double the 88,000 estimate cited in market reports. The data reduced expectations for interest rate cuts by the Federal Reserve this year and added to fears of a more hawkish policy path. The reaction was visible across markets, including a sharp rise in bond yields. Coverage also pointed to traders actively pricing in rate-hike risks by year-end, referencing CME FedWatch positioning. With policy expectations shifting, investors rotated away from rate-sensitive segments, especially big tech and semiconductors.

Semiconductors extended their selloff

Semiconductor shares extended their decline for a third straight session, and chip stocks were reported down 8.1% on the day. The weakness in chips dragged broader tech benchmarks and intensified the Nasdaq’s fall. Broadcom was cited as falling another 6% after suffering a double-digit decline the previous day, while Nvidia was also reported down between about 3% and more than 4% in different market updates. The common driver across these mentions was continued selling pressure in AI and semiconductor-linked names.

Major U.S. indexes: big losses into the close

All three major U.S. stock indexes ended in the red, with the Nasdaq posting its largest one-day percentage drop since last year, according to the reports provided. Preliminary closing data showed steep point declines across benchmarks. The S&P 500’s fall also marked the end of its nine-week run of Friday-to-Friday gains, described as its longest weekly winning streak since one that ended in December 2023. Separate updates throughout the day carried different point and percentage readings, but the closing snapshot highlighted the scale of the move.

Bond yields jumped as markets repriced the Fed

Bond yields surged alongside the equity selloff. Reports cited the 10-year Treasury yield rising to 4.54% from 4.47%, and also referenced the 10-year climbing above 4.5% during the session. Another update noted the 30-year Treasury yield moving above 5%. Higher yields can tighten financial conditions and make future cash flows less valuable in present terms, which is one reason growth stocks often react sharply to sudden moves in rates.

Crypto-linked stocks fell with bitcoin

Crypto-related equities also declined as bitcoin dropped. Coverage cited bitcoin falling 4.8% in one update and 4.1% in another, while another line referenced bitcoin cracking below $10,000. Coinbase and Strategy were among the notable laggards, with reported declines ranging from about 7% to 11% in different market summaries. The link between bitcoin’s move and listed crypto-sensitive stocks was highlighted as part of the broader risk-off tone.

What else was in focus: index rules and big IPO eligibility

Beyond the immediate macro reaction, the material also referenced a policy decision by S&P Dow Jones Indices. It said the index provider will keep existing eligibility requirements for benchmarks including the S&P 500, closing the door to fast entry for big tech IPOs such as SpaceX and delaying potential passive-fund flows. While not a driver of the day’s market drop on its own, it adds context to how index inclusion rules can influence investor positioning and capital flows.

Spillovers and global positioning

The selloff narrative extended beyond U.S. equities. One update noted India’s Sensex was down 0.3% during the period covered. Separate market commentary also referenced pressure on semiconductor leaders outside the U.S., including ASML in Europe, described as down nearly 4%. The broader theme across these references was a global tech and chip “contagion” as investors reduced exposure to the AI-led rally.

Market impact: why this session mattered

Friday’s declines mattered not only because of their size, but because they interrupted a strong multi-week run for U.S. equities and came with a clear macro catalyst. A hotter-than-expected jobs report pushed yields higher and weakened the case for near-term easing, hitting tech and semiconductors particularly hard. With chips down 8.1% and tech shares reported down 4.6%, the market’s leadership segment took the brunt of the adjustment. The resulting Nasdaq fall of more than 4% underscored how quickly sentiment can change when rates and policy expectations reset.

Conclusion

U.S. stocks ended the week lower after the May employment data strengthened the case for interest rates staying higher for longer, while the semiconductor selloff accelerated. The S&P 500’s nine-week winning streak ended as the Nasdaq posted its sharpest one-day drop in the period cited. Markets now move into the next set of inflation and Fed-related signals with yields elevated and tech leadership under pressure.