Wall Street Tumbles: Nasdaq Drops 4% Amid Chip Stock Sell-Off

Wall Street stocks plunged on Friday, marked by a violent sell-off in chip company shares. The technology-heavy Nasdaq Composite index fell 4%, its largest daily drop since early 2025's tariff turmoil. The precise trigger for the semiconductor stock correction remained unclear. Disappointment over Broadcom's AI chip forecast revision on Wednesday had pressured stocks Thursday, but Friday's selling intensified. Rising U.S. Treasury yields, following a stronger-than-expected May employment report, further soured sentiment. The Nasdaq closed down 4.18% at 25,709.43 points. The S&P 500 lost 2.64% to 7,383.74, while the Dow Jones Industrial Average shed 695.15 points, or 1.35%, to end at 50,866.78. The blue-chip index had reached a record high on Thursday. On a weekly basis, the S&P 500 fell over 2%, marking its first negative week in ten consecutive positive ones. The Nasdaq Composite tumbled 4.7% overall, while the Dow Jones finished slightly lower. "Investors had their finger on the sell button," said Mark Hackett, chief of market strategy at Nationwide. "Not necessarily to get out entirely, but if you've owned semiconductor stocks for the last two months, you've gotten ahead of your long-term target. At some point, you have to lock in gains."

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Investors had their finger on the sell button. Not necessarily to get out entirely, but if you've owned semiconductor stocks for the last two months, you've gotten ahead of your long-term target. At some point, you have to lock in gains.