Skip to content 
U.S. stocks suffered their first meaningful setback in more than two months as rising bond yields, stronger-than-expected economic data, and a sharp selloff in semiconductor stocks rattled investors.
Major Index Performance
- S&P 500: -2.6%
- Nasdaq Composite: -4.7%
- Dow Jones Industrial Average: -0.3%
The technology-heavy Nasdaq endured its worst week since April 2025, while the S&P 500 snapped a nine-week winning streak. The Dow proved more resilient but still finished lower for the week.
What Moved Markets?
Strong Jobs Report Rekindled Fed Concerns
May payrolls increased by 172,000, roughly double expectations, while unemployment held steady at 4.3%. Stronger labor data suggested the economy remains resilient, but investors worried that persistent strength could keep inflation elevated and reduce the likelihood of Federal Reserve rate cuts. Treasury yields rose sharply as markets began pricing in a more hawkish Fed outlook.
AI and Semiconductor Stocks Corrected
Technology shares led the decline. Semiconductor stocks experienced a broad selloff after disappointing guidance from Broadcom raised concerns over lofty AI-related expectations. Nvidia, AMD, Broadcom, Intel, and other chipmakers fell sharply, dragging the Nasdaq to its steepest one-day decline in more than a year. More than $1 trillion in semiconductor market value was erased during Friday’s rout.
Bond Yields Climbed
The 10-year Treasury yield rose above 4.5%, increasing pressure on growth stocks and reducing enthusiasm for richly valued technology companies. Investors began reassessing assumptions that lower rates would support continued market gains.
Middle East and Inflation Risks Remained in Focus
Persistent energy price concerns and geopolitical tensions added to worries that inflation could remain elevated, reinforcing expectations that monetary policy may stay restrictive longer than previously anticipated.
Earnings Highlights
- Broadcom’s outlook disappointed investors and accelerated selling across AI-related names.
- Lululemon lowered full-year guidance, sending shares sharply lower.
- Cooper Companies delivered strong results and was among the week’s standout gainers.
Bottom Line
Markets entered the week riding strong momentum but were reminded that “good economic news” can become “bad market news” when it raises the prospect of higher interest rates. Investors now turn their attention toward upcoming inflation data and Federal Reserve commentary to determine whether this week’s decline represents a healthy correction or the beginning of a more prolonged period of volatility.
