Stock market news: Nasdaq falls as AI stock selloff deepens

In today’s stock market news, U.S. stocks fell sharply on Friday as a selloff in AI stocks and chip stocks gathered speed, according to the Wall Street Journal. The Nasdaq Composite dropped about 4%, led by declines in Nvidia and Broadcom, after Broadcom’s outlook raised fresh questions about how fast AI demand will grow, CNBC added.

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The S&P 500 also fell, while the Dow Jones Industrial Average lost ground but held up better than the tech-heavy indexes, according to CNBC. The Philadelphia Semiconductor Index slid 9%, and several chipmakers, including Marvell, Micron, Intel, AMD, Qualcomm and Arm Holdings, fell by 9% or more, the publication reported.

“This is a bit of profit taking,” said Anshul Sharma, chief investment officer at Savvy Wealth, per CNBC. “The AI narrative still remains intact, but I do think that the expectations got more elevated than they thought, and I think even relatively good news can end up disappointing when it's not as high as where the expectations are.”

Jobs data lifts rate worries

A stronger-than-expected May jobs report added to the pressure. The Labor Department said employers added 172,000 jobs, above the 80,000 economists expected, while the unemployment rate held at 4.3%, according to CNBC.

That report pushed Treasury yields higher, with the 10-year yield rising above 4.5% and the 30-year yield moving above 5%. Traders now see a nearly 70% chance the Federal Reserve will raise rates by the end of the year, up from just under 50% before the report, according to CME data cited by CNBC.

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President Trump wrote after the report, “With a great Jobs Report, like just announced, stocks should go up, not down.” He added, “Growth does not mean inflation!”

Investors moved money into healthcare and consumer staples, with Colgate-Palmolive, Coca-Cola and Johnson & Johnson all rising, CNBC reported. Bitcoin also fell below $60,000 as risk appetite faded.

The Nasdaq was on track for its sharpest weekly decline in more than a year, while the S&P 500 was set to break a nine-week winning streak.