Nasdaq Crashes 4.18% on Chip Selloff, Worst Day Since April 2025

The Nasdaq Composite plunged 4.18% to 25,709.43 on Friday, marking its worst day since April 2025. The S&P 500 fell 2.64% to 7,383.74, and the Dow dropped 695.15 points to 50,866.78. A violent selloff in semiconductor stocks triggered the market rout. Broadcom’s failure to raise its AI chip outlook sparked the decline, while strong May jobs data and rising Treasury yields accelerated losses. With Meyka rating the Nasdaq a C+ and forecasting 22,613.65 by year-end, the data points to near-term weakness.

Chip Stocks Lead the Collapse

Semiconductor shares crashed across the board Friday. The iShares Semiconductor ETF dropped 10% for its worst day since March 2020. Broadcom fell 8% after tumbling 12% Thursday. Marvell Technology plunged 16%, while Intel and Advanced Micro Devices each lost 11%. Micron Technology, a star performer this year, fell 13% after dropping 8% Thursday. Investors took profits after owning these stocks through a two-month surge.

Jobs Data Triggers Rate Hike Fears

The U.S. economy added 172,000 jobs in May, beating expectations and shifting market focus to inflation risks. The 10-year Treasury yield jumped to 4.54%, pressuring stock valuations. Traders now price a 43% chance the Federal Reserve hikes rates in December, up from 26% a month ago. Wall Street’s fear gauge, the VIX, surged 40% to its highest level in two months. Strong job gains raised rate hike odds, making investors sell bonds and stocks.

Broader Market Pain and Risk-Off Sentiment

The S&P 500 snapped a nine-week winning streak and fell into the red for the week. Bitcoin tumbled 5% and dipped below $60,000, hitting its lowest level since October 2024. Investors fled chip stocks as profit-taking accelerated. The Nasdaq fell 4.7% for the week. Meyka’s technical indicators show RSI at 46.27 and ADX at 33.35, signaling a strong downtrend with oversold conditions.

Outlook Remains Uncertain

Semiconductor stocks remain up 79% year-to-date despite Friday’s collapse. Meyka forecasts the Nasdaq at 22,613.65 by year-end, 12% below current levels. The S&P 500 holds a C+ grade with a 7,250.83 year-end target. Investors face competing signals: strong employment supports the economy, but rising rates threaten growth stocks and tech valuations.

Final Thoughts

Friday’s selloff reflects profit-taking in chip stocks and rising rate expectations. With the Nasdaq down 4.7% for the week and Meyka’s forecast suggesting 12% downside, near-term volatility will likely persist as investors reassess valuations.

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