Nasdaq Suffers Worst Single-Day Crash Since April 2025 as Chip Stocks Collapse and Jobs Report Kills Rate-Cut Hopes

Nasdaq Suffers Worst Crash Since April 2025 — What Happened and What Comes Next

Wall Street endured one of its most brutal trading sessions of 2026 on Friday, June 6, as a perfect storm of disappointment hit US equity markets simultaneously. The Nasdaq Composite collapsed 4.18%, closing at 25,709.43 — its worst single-day decline since the tariff-driven turmoil of April 2025. The S&P 500 fell 2.64% to 7,383.74, while the Dow Jones Industrial Average surrendered 695 points, or 1.35%, settling at 50,866.78. In a single session, the broad market index recorded its biggest one-day loss since October, pushing the S&P 500 to its first losing week after a 10-week winning streak.

Broadcom Lit the Fuse

The selloff began in earnest the night of June 4, when Broadcom — one of the semiconductor sector's most closely watched bellwethers — reported quarterly earnings that failed to impress investors on the AI chip outlook front. Despite posting record revenues, Broadcom's forward guidance for custom AI chip revenue came in below the sky-high expectations Wall Street had built into the stock. The company's shares plummeted over 13% in the following session and continued declining through Friday, ultimately falling more than 7.9% on the day. The disappointment proved highly contagious across the entire chip sector.

Marvell Technology dropped approximately 16%, Micron Technology slid 13.3%, Intel lost around 11%, AMD fell 12.6%, and Nvidia — the unquestioned symbol of the AI trade — declined 6.2%. The WisdomTree Semiconductor ETF saw one of its worst weeks in years. For context, these are stocks that had surged dramatically since late March on the back of renewed AI infrastructure optimism. In the space of two trading sessions, much of those gains evaporated.

A Jobs Report That Cut Both Ways

If Broadcom set the fire, Friday's May employment report poured accelerant on it. The US economy added 172,000 jobs in May — more than double the 88,000 economists had expected — while the unemployment rate held steady at 4.3%. On any ordinary day, such strong labor market data would be celebrated as a sign of economic resilience. But in the current environment, where the Federal Reserve has kept rates elevated throughout 2026 amid persistent inflation pressures from the Iran conflict, a blowout jobs number is the last thing rate-sensitive equity markets wanted to hear.

The strong data immediately pushed Treasury yields higher, with the US 10-year yield climbing toward 4.57%. Higher yields compress the valuations of growth-oriented technology companies, which are valued on future earnings discounted at prevailing interest rates. When rates go up, those valuations shrink — and in a market where AI stocks were trading at historically stretched multiples, the repricing was swift and severe.

Goldman Sachs: No Fed Cuts Until 2027

Following the jobs report, Goldman Sachs economists officially abandoned their forecast for any Federal Reserve rate cuts in 2026. The bank's chief US economist David Mericle stated that the firm now expects the first rate cut to come in June 2027, moving back its previous projection of December 2026. Goldman simultaneously raised the probability of a modest rate hike this year to 20%, though the bank's base case still calls for no action in either direction through year-end. Nomura had already adopted a similar stance the previous month. Meanwhile, CME's FedWatch tool showed markets pricing a 42.7% probability of a December 2026 rate hike, a dramatic shift from just weeks ago when cuts were being priced in.

Only Citigroup held a contrarian position, with chief US economist Andrew Hollenhorst still forecasting three quarter-point cuts in 2026. Citi's view depends on a meaningful deterioration in the labor market over the coming months — a scenario most market participants now view as a minority case.

Meta's AI Funding News Deepened the Pain

Late in Friday's session, news broke that Meta was also exploring a massive equity raise to fund its own AI buildout — a report that sent Meta shares down 5.5% and further darkened sentiment in the tech sector. Coming just days after Alphabet's announcement of an $84.75 billion equity capital raise, the Meta reports reinforced a growing Wall Street narrative: that the AI infrastructure spending race is so capital-intensive that even the most profitable technology companies on earth cannot fund it from their own cash flows.

Gold, traditionally a safe haven during equity market turbulence, also fell more than 3.5% on the day — erasing all of its 2026 gains — as higher real interest rates reduced the appeal of non-yielding assets. The dollar strengthened broadly.

What This Means for Investors

Analysts at Edward Jones cautioned that while the bar for actual rate hikes remains high, requiring evidence of persistently accelerating inflation rather than a single strong payrolls report, the new Fed chair Kevin Warsh faces a genuinely difficult balancing act. The FOMC is visibly divided, inflation is running above target due to energy price shocks from the Iran conflict, and a labor market that refuses to cool means the Fed has little incentive to ease policy any time soon.

For equity markets, the selloff raises fundamental questions about whether the AI trade has run ahead of reality. As one analyst noted, Broadcom's results were not bad in absolute terms — the company posted record revenue. The problem was that expectations had been calibrated to perfection, leaving no margin for any disappointment in guidance. In a market where "meeting expectations" triggers a double-digit decline, the risk-reward calculus for high-multiple AI stocks has fundamentally changed.

Key Market Data — June 6, 2026

The Road Ahead

With SpaceX's historic $1.75 trillion IPO scheduled for June 12, Apple's WWDC underway, and the Bank of Canada's rate decision due June 10, markets face a packed calendar of potential catalysts. Whether Friday's selloff marks a healthy reset in AI valuations or the beginning of a broader de-rating of the technology sector will depend heavily on whether future earnings reports — and particularly Nvidia's upcoming results — can justify the multiples investors have been willing to pay.

For now, the market is repricing risk with a new clarity: the Federal Reserve is not coming to the rescue anytime soon, AI chip demand is real but not infinite, and the era of cheap money that supercharged tech valuations belongs firmly to the past.