Wall Street has suffered one of its worst days of the year, with all three major US stock indexes sliding sharply in a broad selloff driven by a surprisingly strong jobs report and a sudden retreat from the artificial intelligence stocks that had powered the market higher for weeks. By the close, the rout had wiped more than a trillion dollars in value off the market, abruptly reversing a long run of gains that had pushed indexes to record highs.
The technology-heavy Nasdaq Composite bore the brunt of the damage, tumbling more than 4 percent in what was its worst single day since April 2025. The index had been riding a powerful rally fueled by enthusiasm over artificial intelligence, but that momentum reversed violently, with investors rushing to pull money out of the very stocks that had led the charge upward in recent months.
The broader S&P 500 fell about 2.64 percent, marking its biggest one-day drop since October, while the Dow Jones Industrial Average dropped roughly 695 points, or 1.35 percent, in its worst session in about three months. The scale of the declines across all three indexes underlined how quickly sentiment had soured after a sustained period of optimism on Wall Street.
One of the main triggers was the latest US jobs report, which came in far stronger than expected. Employers added 172,000 jobs in May, more than double what many economists had predicted, while the unemployment rate held steady at 4.3 percent. Rather than cheering the strength, markets took fright, worried that a robust labor market would push the Federal Reserve to prioritize fighting inflation over cutting interest rates.
With a hot jobs report in hand, traders rapidly scaled back their bets on further rate cuts, with some now seeing another reduction in 2026 effectively off the table. Higher-for-longer interest rates tend to hit the most speculative and long-duration stocks the hardest, and that pressure landed squarely on the high-flying technology and chip names that had become the market's favorites.
Compounding the pain was a sharp pullback in semiconductors. A weaker-than-expected outlook for artificial intelligence chips from Broadcom sent its shares plunging and dragged down the wider chip sector, with memory-related names such as Micron falling heavily. The iShares Semiconductor ETF sank around 10 percent as the enthusiasm that had inflated the sector rapidly deflated.
The Philadelphia Semiconductor Index suffered its largest one-day percentage plunge since March 2020, erasing more than a trillion dollars in stock market value. For a market that had grown used to setting fresh records, the abrupt turn served as a stark reminder of how concentrated recent gains had become, and how exposed investors were to any shift in the outlook for chips and interest rates.