Stock market today: Nasdaq plunges 4%, Dow and S&P 500 sink as AI trade halts on Fed hike bets
US stocks fell sharply on Friday, with tech leading the way down after May’s jobs report blew past expectations, while a rotation out of tech stocks and chipmakers continued.
The Dow Jones Industrial Average (^DJI) fell 1.3%. The benchmark S&P 500 (^GSPC) sank 2.6%, while the tech-heavy Nasdaq Composite (^IXIC) plunged by over 4.1%, with shares of Nvidia (NVDA) falling 6%.
The May jobs report far exceeded expectations, with US employers adding 172,000 jobs last month, well above economists’ expectations of around 88,000. The unemployment rate held steady at 4.3%.
But the strong report also fueled bets on a Federal Reserve rate hike at some point this year, as the labor market stabilizes amid high inflation. Traders are now fully pricing in a rate hike from the central bank by the end of the year, even as President Trump continues to call for cuts as Kevin Warsh, his appointee to chair the Fed, takes the helm.
Meanwhile, the rotation out of chipmakers and tech stocks gathered steam. Broadcom (AVGO) earnings sent shockwaves through the AI trade earlier this week, and shares continued plummeting on Friday. Micron (MU), AMD (AMD), and Intel (INTC) all sank.
The S&P 500 snapped a historic weekly winning streak. The benchmark index fell 2.5% for the week, posting its first weekly decline in 10 weeks.
Elsewhere, the fragile ceasefire between the US and Iran, along with reports of stalled negotiations, continues to fuel uncertainty on Wall Street, even as President Trump assures that talks are in their “final” stages.
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Tech stock on pace for their worst day since April 2025
Tech (XLK) stocks were on pace for their worst day since April 2025 on Friday, before the post-Liberation Day pivot from President Trump.
The sector declined more than 5% as Big Tech, semiconductors, and software stocks all took a hit amid the prospect of higher interest rates.
A hotter-than-expected jobs report has raised the expectations that the Federal Reserve will be forced ot raise interest rates to combat an overheated economy and rising inflation.
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Bitcoin extends decline as broader market sinks
Bitcoin (BTC-USD)extended its decline along with the broader market on Friday, sinking more than 2% to $61,000.
As Yahoo Finance’ s Brian Sozzi points out, bitcoin prices have fallen below their 200-day moving average for the first time since 2023. Historically, this has made for a good buying opportunity.
Traders widely consider the 200-day moving average to be the “ultimate trendsetter” in financial markets. It represents the average closing price of a stock, digital asset, or index over the past 200 trading days, effectively smoothing out daily “noise” to reveal the long-term trajectory.
Bitcoin prices have fallen to their lowest level since February. Prices are down more than 14% in a single week and 21% over the past four weeks.
Bitcoin reached its definitive all-time high in October 2025, when the cryptocurrency staged an unprecedented, massive bull run that peaked around $125,000.
Read more here.
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Freight expert says fuel shortage could leave 10% of global shipping fleet idle
The head of freight at global commodities trading house Mercuria said fuel shortages could leave 10% of the global shipping fleet idled, threatening a major squeeze on the global logistics system that moves 80% to 90% of the world’s goods.
“For marine fuel oil, there’s no buffer. There’s nothing,” Larry Johnson, head of freight at Mercuria, said in comments to S&P Global. “So once you’re out, you’re out.”
The effective closure of the Strait of Hormuz has cut off roughly 14 million barrels per day of crude oil from the global energy market, squeezing supplies that have been offset by increasingly dwindling pre-war stockpiles.
While the crude oil market has tightened significantly, sending prices on international Brent (BZ=F) and US WTI crude (CL=F) up by roughly 30% to 40% since the start of the war, stocks of refined products — which are stored in smaller sums and require crude oil to make — are squeezed even harder.
Benchmark prices on very low-sulfur fuel oil in Singapore, the world’s largest bunkering hub, have surged since the start of the war. · Bloomberg Data Most of the global shipping fleet relies on a form of marine fuel called very-low-sulfur fuel oil. Benchmark prices for the product in Singapore, the world’s largest bunkering hub, surged by as much as 134% earlier in the war, though prices have cooled to a gain of roughly 55%.
“My view on marine fuel oil is there will be regional stock-outs by July and that there are potentially outages in the major hubs by August, September, at the latest,” Johnson told S&P Global.
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Nvidia falls 3% as chip stocks drag stocks lower
Tech stocks resumed their slide on Friday, as chip and hardware stocks led the way lower.
Broadcom stock (AVGO), which fell about 13% on Thursday after its disappointing AI chip sales outlook sparked a sell-off in the AI trade, continued to decline 4.6% in early trading.
On Thursday, the tech-heavy Nasdaq Composite (^IXIC) dropped as investors rotated into sectors like healthcare and financials. But some dip-buying behavior late in the afternoon cushioned the declines.
Following Friday’s jobs report, which raised the possibility of rate hikes this year, tech is again on the back foot.
Megacap Nvidia (NVDA) dragged the major indexes lower, falling more than 3% in the morning session, while other chipmakers, Intel (INTC), Micron (MU), and AMD (AMD), fell more than 6%.
Friday morning’s sector action. -
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Traders fully price in quarter-point hike by year-end
Traders are now fully pricing in a one-quarter-point hike by the December meeting of the Federal Reserve, according to Bloomberg data.
The hawkish shift for Fed bets comes after today’s nonfarm payrolls report showed 172,000 jobs added in May, but the unemployment rate remained steady at 4.3% for the third month in a row.
Traders are now fully pricing in a quarter-point rate hike by year-end, per Bloomberg data. · Bloomberg Data At the same time, inflation has remained sticky above target as shifts in energy prices led by the war in Iran appear to have begun slowly bleeding into the so-called “core” readings.
The Personal Consumption Expenditures index — the Fed’s preferred measure of inflation — showed that inflation rose at the fastest rate seen on the index in three years. On an annualized basis, headline PCE rose by 3.8%, while core PCE prices rose a slightly slimmer 3.3%.
Traders are still betting the Fed will remain on hold in the near term, but consensus has shifted to a near-certainty of at least one 25 basis point hike by year-end. Odds of a rate hike at the October Fed meeting stand at nearly 70%, which would come only weeks before the midterm elections.
The European Central Bank and Bank of England will meet in the next two weeks, and both central banks are expected to hike rates. In the US, the upcoming June meeting of the Federal Reserve will be the first for Kevin Wash as chairman.
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S&P denies SpaceX, other mega-cap IPOs from rapid index entry
Bloomberg reports:
S&P Dow Jones Indices will keep its existing eligibility requirements for main benchmarks like the S&P 500 Index, rejecting proposals that would have made it faster for mega-cap companies such as Elon Musk’s SpaceX to gain rapid entry into the benchmark after going public.
The index provider in a press release Thursday said it will not shorten the 12-month seasoning period for newly public companies it currently has or waive existing profitability and public-float requirements based on a company’s size, diverging from a broader industry shift embraced by rivals Nasdaq Inc. and FTSE Russell.
SpaceX logo is seen in this illustration taken June 3, 2026. REUTERS/Dado Ruvic/Illustration · REUTERS / REUTERS The decision arrives as Wall Street grapples with a new reality: some companies are reaching unprecedented sizes before they ever enter public markets. The consultation, launched earlier this year, effectively asked whether index rules written for a different era should bend to accommodate companies that now arrive at a scale once reserved for mature blue chips in what has become known as the “fast entry” in industry parlance.
The push for quicker inclusion has raised concerns among some investors who say rules around profitability, float and trading history exist precisely to prevent benchmarks from chasing hype. Furthermore, adding IPOs too quickly, they say, could expose passive funds to greater volatility and force them to buy shares before reliable market pricing is fully established.
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