US stocks today: Nasdaq crashes 1,100 pts, Dow 600 pts as chip stocks slide; jobs data fuels rate hike fears
Wall Street's nine-week winning streak ended with a thud on Friday, as red-hot technology stocks suffered their largest โdaily decline this year after a hot May jobs report fueled fears of a hawkish policy pivot from the U.S. Federal Reserve.Selling was concentrated among chip stocks and other technology favorites that have surged higher in recent weeks as the Nasdaq Composite Index and S&P 500 rose repeatedly to fresh highs.All three major U.S. stock indexes closed sharply lower, with โplunging chip stocks โ dragging the โ tech-laden Nasdaq down by its largest one-day percentage loss since last year.The S&P 500 ended its nine-week run of Friday-to-Friday gains, its longest weekly winning streak since one that ended in December โ2023."After the record run we've seen the last nine weeks in equities, specifically tech and semiconductors, the dam just broke today," said Ryan Detrick, chief market strategist โat Carson Group in Omaha. "Obviously, the stronger-than-expected jobs report puts the Fed in a tough spot regarding any interest rate cut for the rest of the year. And the market is throwing a fit by hitting the big winners so far this year."Rising interest rates and the Iran war weighed on โsentiment heading into the weekend, but many investors said they expected tech stocks to continue rallying."The market โ reaction today โwas more driven by positioning rather than fundamentals," said Ohsung Kwon, chief equity strategist at Wells Fargo. "The semiconductor sector was โway overbought. That's why we're โseeing the selloff. I don't think it's the end of the semi bull market." The U.S. economy added 172,000 jobs โ in May, according to the Labor Department, more than double analyst expectations, while the unemployment rate โheld firm at 4.3%. The robust report was double-edged: it provided reassurance of U.S. economic health, but โall but killed any hopes of an interest rate cut from the Fed in the near future.Financial markets are pricing in a growing likelihood of a rate hike at the conclusion of the Fed's December meeting, according to CME's FedWatch tool.Fading hopes for a near-term resolution to the Middle East war and reopening the Strait of Hormuz are stirring fears that energy price pressures could morph into wider, systemic inflation. Iran reaffirmed its support for Hezbollah and demanded that Israel withdraw its troops from southern Lebanon, further complicating efforts to secure a near-term peace deal that would include the resumption of traffic through the โcrucial strait. U.S. President Donald Trump's administration has negotiated three truces, and while fighting has been greatly reduced, the two sides continue to trade airstrikes.According to preliminary data, the S&P 500 lost 199.64 points, or 2.63%, to end at 7,384.67 points, โwhile the Nasdaq Composite lost โ1,117.38 points, or 4.16%, to 25,713.58. The โ Dow Jones Industrial Average fell 684.53 points, or 1.33%, to 50,877.40.Nvidia, the largest company by market value, fell sharply, as did smaller rivals Intel, Micron, AMD and Broadcom. Lululemon Athletica slumped after the athletic apparel maker cut its annual profit forecast and projected second-quarter earnings well below Wall Street estimates. Cooper Companies rose โafter the contact lens maker beat estimates for second-quarter results.Cryptocurrency firms Coinbase and Strategy were pulled lower by bitcoin's sharp drop. S&P Global said it would not change the eligibility requirements for its major indices, which effectively rules out a swift entry for Elon Musk's SpaceX to the benchmark S&P 500 after it goes public in what would be the world's biggest initial public offering.S&P Dow Jones Indices will announce the results following its rebalancing after markets close. Chipmaker Marvell Technology, which boasts over $270 billion in valuation, is among the contenders to be added to the benchmark index.