Wall Street rally ends as Nasdaq tumbles and chip stocks erase $1 trillion in value
Wall Street’s nine-week winning streak ended Friday as the Nasdaq Composite fell 4.18% and the S&P 500 dropped 2.64%, with chip and tech stocks leading losses. The Philadelphia SE Semiconductor Index plunged, wiping out more than $1 trillion in value, after May jobs data showed 172,000 jobs added and unemployment at 4.3%, raising expectations of a hawkish Fed.
How this was made
The 30-second read
Why it matters
A hawkish policy repricing reduced near-term rate-cut odds, while semiconductors are described as overbought; company-specific earnings guidance (LULU down, COOP up) and crypto beta (COIN/STRK) explain several idiosyncratic moves.
Market read
Traders get a same-day read-through: semi/tech positioning unwound on macro rates repricing, while earnings guidance and crypto beta drove several single-name moves.
What to watch
Crypto weakness is explicitly tied to BTC’s drop; index-rebalance inclusion rumors (MRVL) may create idiosyncratic flows independent of macro.
Background
The article frames the selloff as ending a nine-week Wall Street winning streak, triggered by a stronger-than-expected May jobs report and renewed hawkish Fed expectations.
Ticker impact
Nvidia fell 6.2% as chip stocks sold off, erasing part of the sector’s recent rally amid hawkish Fed fears.
Near-term downside bias until rates/positioning stabilize; volatility likely elevated.
The article attributes the selloff to positioning after a hot jobs report, with NVDA singled out among the largest decliners.
Intel slid 7.9% during the Nasdaq/semiconductor selloff tied to reduced expectations for Fed rate cuts.
Likely remains correlated to the semi tape; rallies may be sold if rates stay restrictive.
No INTC-specific catalyst is cited; the move is described as concentrated among chip stocks.
Micron dropped within the 7.9%–13.3% range as the Philadelphia Semiconductor Index plunged and $1T was erased.
Downside/whipsaw risk persists while the market reprices Fed policy timing.
The article frames the selloff as positioning-driven after the May jobs print, with MU included among decliners.
AMD fell in the 7.9%–13.3% band as chip stocks erased $1T in value on hawkish policy fears.
Choppy-to-lower near term; upside likely requires a shift in rate-cut expectations.
AMD is named only as part of the broad chip selloff; the catalyst is macro/positioning.
Broadcom slid between 7.9% and 13.3% as tech and chip stocks reversed sharply after the jobs report.
Short-term downside bias; mean reversion possible if yields fall.
No AVGO-specific fundamental update is provided; the move is attributed to sector-wide selling.
Lululemon dropped 8.6% after cutting its annual profit forecast and projecting Q2 earnings below Wall Street estimates.
Further downside risk until investors digest the revised outlook; volatility likely remains high.
The article cites concrete guidance changes (annual profit forecast cut and Q2 earnings below estimates) tied to the same-day selloff.
Coinbase fell 7.1% as crypto firms were weighed by a 4.1% bitcoin drop.
Downside likely if BTC weakness persists; rebounds possible with BTC stabilization.
The article directly links COIN’s decline to bitcoin’s same-day drop.
Strategy (STRK) fell 6.9% alongside bitcoin’s 4.1% drop, reflecting leveraged crypto exposure.
Near-term direction follows BTC; expect elevated volatility.
The article attributes STRK’s decline to bitcoin falling 4.1%.
Market effects
Semiconductors and tech are shown as crowded/overbought; a hawkish rates repricing triggered a sector-wide de-risking.
US equity indexes (Nasdaq/S&P 500) reversed sharply, likely pressuring global tech/semis via correlation.
Iran/Strait of Hormuz reopening fears raise systemic inflation risk, which can keep global yields and risk premia elevated.
Counterpoint
Analysts quoted suggest the semi selloff is positioning-driven and may not end the broader semiconductor bull market.
Key entities
- regulatorU.S. Federal Reserve
Hotter jobs data increased fears of a hawkish policy pivot and reduced expectations for near-term rate cuts.
- market_toolCME FedWatch
Prices a 42.7% likelihood of a rate hike at the December meeting.
- indexPhiladelphia SE Semiconductor Index
Suffered its largest one-day percentage plunge since March 2020, erasing more than $1T in value.
- companyLululemon Athletica
Cut annual profit forecast and guided Q2 earnings below Wall Street estimates.
- companyCooper Companies
Beat Q2 estimates, rising despite the broader risk-off tape.
