Wall Street endured its worst session in months on Friday as a surprisingly strong jobs report collided with a deepening selloff in semiconductor stocks, dragging all three major indexes into the red. The tech-heavy Nasdaq Composite bore the brunt of the damage, plunging more than 4% in a broad-based retreat from the artificial intelligence trade that had powered markets to record highs earlier in the week.
What Moved Markets
The Dow Jones Industrial Average fell 695.15 points, or 1.35%, to close at 50,866.78. The S&P 500 dropped 200.57 points, or 2.64%, finishing at 7,383.74. The Nasdaq Composite tumbled 1,121.53 points, or 4.18%, to end the day at 25,709.43.
The selling was triggered by May’s nonfarm payrolls report, which showed employers added 172,000 jobs — nearly double the 88,000 economists had forecast. The unemployment rate held steady at 4.3%, while average hourly earnings rose 0.3%, in line with expectations. The blowout number reignited concerns that the Federal Reserve may need to raise interest rates later this year to cool a still-hot labor market, sending the benchmark 10-year Treasury yield surging to 4.54%.
The “good news is bad news” dynamic hit growth stocks hardest. The technology sector within the S&P 500 plunged 6.65%, while defensive areas like consumer staples (+1.64%), utilities (+0.80%), and healthcare (+0.65%) held up as investors rotated into safety.
Notable Movers
Marvell Technology (MRVL) was the day’s biggest casualty among large-cap chipmakers, cratering 16.74% to $263.47 as the Broadcom-led selloff hammered custom silicon names. The stock had surged more than 130% since the start of the year, and traders took the opportunity to lock in profits as sentiment turned against the AI trade.
Micron Technology (MU) dropped 13.25% to $864.01, while Broadcom (AVGO) fell 7.92% to $385.73 after the company’s third-quarter AI chip revenue projection of $16 billion missed the $17.2 billion analysts had expected. Nvidia (NVDA) slid 6.19% to $205.12, pushing its market cap below $5 trillion.
Lululemon (LULU) sank 8.56% to $114.23 after slashing its full-year revenue outlook to $11 billion to $11.15 billion, down from a prior target of $11.5 billion. North American comparable sales fell 5% in the first quarter, marking the fifth straight quarterly decline in the region, while gross margins contracted 410 basis points.
DocuSign (DOCU) fell 7.22% to $47.26 despite beating fiscal first-quarter earnings and revenue estimates. Investors were disappointed by underwhelming full-year guidance, and several analysts cut their price targets, with Wells Fargo lowering its outlook from $60 to $55.
Looking Ahead
The sharp reversal puts markets at an inflection point heading into next week. Investors will be closely watching Fed commentary for any signals on the rate path after Friday’s jobs surprise. With the 10-year yield back above 4.5% and the AI trade under pressure, the question is whether the semiconductor selloff represents a healthy pullback or the start of a broader rotation away from the mega-cap growth stocks that have led the rally. Second-quarter earnings season, with FactSet projecting 21.6% growth for the S&P 500, could provide the next catalyst — but for now, the market’s mood has shifted decidedly cautious.