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.
High-beta semiconductor drawdown likely pressures NVDA momentum and positioning trades.
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.
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.
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 relevance
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.
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.
Alternative perspectives
Analysts quoted suggest the semi selloff is positioning-driven and may not end the broader semiconductor bull market.
Crypto weakness is explicitly tied to BTC’s drop; index-rebalance inclusion rumors (MRVL) may create idiosyncratic flows independent of macro.
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.
