NEW YORK, June 6, 2026, 13:03 (EDT)
- S&P 500 dropped 2.6% this week and the Nasdaq slumped 4.7%. The Dow edged down 0.3%. The pullback snapped a lengthy winning streak after a rout on Friday.
- U.S. payrolls climbed by 172,000 in May, beating the Reuters forecast and putting fresh focus on Fed rate risk.
- Investors have a busy stretch ahead, with SpaceX’s anticipated IPO, U.S. inflation numbers, and earnings from Oracle and Adobe all coming up.
Wall Street’s AI-fueled run stumbled Friday, with chip stocks under pressure after a solid jobs number spurred bets on less Fed easing. The S&P 500 dropped 2.64%. The Nasdaq Composite fell 4.18%. The Dow Jones Industrial Average slid 1.35%. U.S. cash equities are closed for the weekend.
S&P 500’s streak of nine straight Friday-to-Friday gains is over. Tech and semis stopped working as the go-to trade. The Nasdaq just saw its steepest one-day drop since April 2025. Oil kept climbing and the Middle East war didn’t hold buyers back until now.
Jobs, rates, crowded trades, and fresh nerves about the pace of the AI rally all hit at once. Nonfarm payrolls climbed 172,000 in May, the Labor Department said, with unemployment stuck at 4.3%. March and April payrolls were revised up by 93,000.
Labor market strength usually lifts markets, but this one didn’t give investors what they wanted. They say solid jobs data reduces the odds of the Fed cutting rates soon and gives it room to stick to fighting inflation. The Fed’s next statement lands June 17. Tom Porcelli, chief economist at Wells Fargo, said the labor market isn’t in “overheating mode,” but said the numbers will make it easier for hawkish voices at the Fed to hold their ground. Reuters
The rally in equities, and especially tech and semis, ran out of steam, said Ryan Detrick, chief market strategist at Carson Group. “The dam just broke,” Detrick said after stocks stalled following a nine-week climb. For Ohsung Kwon, chief equity strategist at Wells Fargo, “positioning rather than fundamentals” drove the move, but he called the pullback “not the end” for the semiconductor bull run. Reuters
Chip stocks took the biggest hit. The PHLX Semiconductor Index dropped 10.3% for its largest one-day decline since March 2020. U.S.-listed chipmakers saw about $1.3 trillion in market cap wiped out. Broadcom’s custom AI chip demand came in below hopes, souring sentiment for rivals like Nvidia, Micron Technology and Advanced Micro Devices.
Broadcom dropped 7.9% Friday, capping a two-day slide of nearly 20%. Reuters said Nvidia lost around 6%, Micron fell 13%, and AMD slipped almost 11%. Kwon called the semiconductor group “way overbought,” saying prices had run up so much that investors were set up for a fast selloff. Reuters
Stock losses spread to bonds. Treasury yields moved up after the jobs numbers. Higher yields put pressure on stocks by reducing the value of future earnings. The two-year Treasury yield, closely tied to Fed bets, hit 4.16%. The 10-year moved to 4.54%.
The market is still positive for the year despite Friday’s slip. The S&P 500 sits up 7.9% in 2026, the Dow has gained 5.8%, the Nasdaq is up 10.6%, and the Russell 2000 has jumped 14.2%, AP’s market numbers show. For now, it’s a reset — not a reversal.
SpaceX is set to price its IPO on June 11, with trading on Nasdaq scheduled for the following day. The company wants to raise $75 billion at a $1.75 trillion valuation. That scale might pull money from other high-growth tech stocks.
SpaceX has seen investor demand hit about $150 billion, Reuters said Friday, citing people familiar. That’s about double the amount SpaceX wants to raise, putting the offer into oversubscription. Investors signaled interest for more shares than are available, according to .
Mark Hackett, chief market strategist at Nationwide, said there’s still an “insatiable appetite for tech holdings.” Jason Pride, chief of investment strategy and research at Glenmede, said the debate on SpaceX is about whether it signals “market froth.” Matt Wittmer, portfolio manager at Allspring Global Investments, called the listing an “important benchmark” for new growth stocks. Reuters
Inflation will get a look this week when the Consumer Price Index comes out Wednesday. Producer price data lands Thursday. Oracle and Adobe are set to deliver earnings too, giving another update on software and AI supply chain activity. Tech’s slice of the S&P 500 has climbed past 39%, the highest reading so far.
But there’s a clear risk here. If CPI picks up signs that energy costs are hitting more categories, or if SpaceX slips and bond yields push higher, investors could see Friday as more than a chance to lock in gains. Pride said the Fed is “watching this like a hawk.” A soft inflation number might steady stocks, but another hot print could turn a choppy week into a bigger valuation test. Reuters
