Nasdaq Falls 4.2% on Chip Selloff, Worst Day Since April 2025

The Nasdaq Composite fell 4.2% to 25,709.43 on June 5, marking its worst day since April 2025. The selloff was driven by a collapse in semiconductor stocks after the U.S. added 172,000 jobs in May, well above expectations. Investors dumped tech names to lock in profits and raise cash for the SpaceX IPO launching next week at a $1.77 trillion valuation.

Chip Stocks Lead the Decline

The iShares Semiconductor ETF dropped 10% for its worst day since March 2020. Micron Technology fell 13.3%, Marvell Technology dropped 16%, and Broadcom slid 7.9%. Intel and Advanced Micro Devices each lost around 11%. Despite the rout, the semiconductor ETF remains up 79% for the year.

Jobs Report Triggers Rate Hike Fears

The Bureau of Labor Statistics reported nonfarm payrolls increased by 172,000 in May, far above the 80,000 jobs economists expected. The jobless rate held at 4.3%. Bond yields jumped on the data, as markets now price in a better than 60% chance the Federal Reserve will raise rates by year-end. This threatens the valuations of high-growth tech stocks.

Investors Raise Cash for SpaceX IPO

Traders liquidated semiconductor and momentum names to fund positions in SpaceX’s record IPO next week. Mark Hackett, chief market strategist at Nationwide, said investors were “hovering with their finger over the sell button” to rebalance portfolios. Bitcoin tumbled below $60,000 for the first time since late 2024, another sign of profit-taking.

Broader Market Damage

The S&P 500 fell 2.6%, its worst day since October 2025, wiping out $1.8 trillion in market value. The Dow Jones fell 1.4%. Tech giants Nvidia dropped 6.2% and Meta fell 5.5% on reports of a potential stock offering to fund AI infrastructure. Volatility spiked higher as the market posted its first losing week in 10.

Final Thoughts

With Meyka rating the Nasdaq a C+ and forecasting 22,613.65 at year-end (12% below current levels), the selloff reflects genuine profit-taking after a two-month rally. Rate hike fears and IPO positioning pressures suggest further volatility ahead.

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