U.S. stocks suffered a broad sell-off on Friday, led by a sharp collapse in semiconductor names. The Philadelphia Semiconductor Index fell 10.26%, marking its worst one-day drop since March 2020, while the combined market value of U.S.-listed chipmakers shrank by about $1.3 trillion. The Nasdaq slid 4.18%, losing more than 1,100 points in a single session.
Semiconductor rout deepens after record highs earlier in the week
By the close, the Dow Jones Industrial Average was down 1.35% at 50,866, the S&P 500 lost 2.64% to 7,383, and the Nasdaq finished at 25,709 after a 4.18% decline. The Philadelphia Semiconductor Index closed at 12,220. Over two sessions, Thursday and Friday, the index has fallen a combined 12%. That reversal was severe, especially since the index had just set a fresh all-time high on Wednesday. Even after the sell-off, it remains up 73% for the year.
Losses across the sector were steep. Marvell dropped 16.74%, the biggest decline among index components. Micron Technology fell 13.21%, ARM lost 12.84%, AMD slid nearly 11%, Broadcom fell 7.92%, TSMC dropped 6.68%, and NVIDIA declined 6.20%. NVIDIA alone lost more than $300 billion in market value in one day, while Micron shed about $150 billion.
“Jensen Huang picks” all closed lower
A basket of companies tied to NVIDIA investment or partnership announcements at Computex had been dubbed the “Jensen Huang picks” by the market. On Friday, every one of them fell. Besides Marvell, Nokia dropped 13.48%, Nebius lost 12.27%, IREN fell 12.14%, Intel declined 11.28%, Coherent dropped 10.64%, Corning fell 10.18%, Lumentum lost 8.62%, and CoreWeave slid 7.07%.
Marvell’s reversal stood out. Just three days earlier, Jensen Huang had described the company at Computex as the “next trillion-dollar company,” helping push the stock up 23% in premarket trading to a record high of $269. By Friday’s close, that move had fully flipped into a sharp loss. The shift in sentiment around AI chip names happened fast, within 72 hours.
Broadcom guidance and strong payrolls added pressure
The first shock came from Broadcom. Earlier this week, the company said its third-quarter AI semiconductor revenue guidance was $16 billion, up more than 200% year over year, but still below analyst expectations. Its full-year AI chip sales guidance came in at $56 billion, below the Wall Street consensus of $57.6 billion. Broadcom shares have now fallen nearly 20% over two trading days.
The second hit came from U.S. labor data. The Bureau of Labor Statistics reported 172,000 nonfarm jobs added in May, far above the market expectation of 85,000, while the unemployment rate held at 4.3%. CME FedWatch data showed the probability of a rate hike before year-end rising from 48% to above 60%. Cleveland Fed President Beth Hammack said rate hikes could soon become appropriate.
Market participants differed on what the sell-off means. Triple D Trading trader Dennis Dick said many investors had been blindly buying dips and that approach stopped working on Friday. Wells Fargo chief equity strategist Ohsung Kwon said semiconductor stocks had been heavily overbought and described the move as profit-taking rather than the end of the semiconductor bull market.