Tech Sell-Off Snaps Wall Street's Nine-Week Rally

A surging May jobs report brought Wall Street’s nine-week winning streak to a sharp conclusion on Friday, as investors dumped technology holdings over fears that the Federal Reserve will maintain a hawkish stance on interest rates to combat persistent inflation risks.

The Nasdaq Composite Index suffered its steepest single-day percentage decline since April 2025, driven by a panicked exit from chip stocks. The Philadelphia SE Semiconductor Index recorded its worst performance since March 2020, erasing more than $1 trillion in total market capitalization. This wave of selling also dragged the S&P 500 down, ending a prolonged period of consecutive weekly gains.

Market strategists view the volatility as a correction triggered by aggressive positioning rather than a shift in economic fundamentals. Ohsung Kwon of Wells Fargo pointed to an overbought semiconductor sector as the primary catalyst for the retreat. These internal pressures were exacerbated by broader anxieties, including the ongoing conflict in the Middle East and the potential for long-term interest rates to remain elevated, fueling systemic concerns about future inflation.