Wall Street's worst day of 2026: Nasdaq -4.1%, chip stocks lose ~$1tn after hot May jobs report flips Fed-hike odds

US equities suffered their worst session of 2026 on Friday, June 5, after a far-stronger-than-expected May jobs report pushed traders to price interest-rate hikes rather than cuts. The economy added 172,000 jobs versus consensus near 80,000-88,000, with unemployment steady around 4.3%. The Nasdaq Composite tumbled about 4.1% (or 4.18%), its worst day since April 2025; the S&P 500 fell roughly 2.6% (its worst day in months, snapping a nine-week winning streak) and the Dow dropped about 1.3% (about 695 points).

The selloff was concentrated in AI and semiconductors: the PHLX Semiconductor Index plunged more than 10% (its worst day since March 2020) and US-traded chipmakers shed on the order of $1-1.3 trillion in market value, with Nvidia falling about 6% and slipping below a $5 trillion market cap. The probability of a Fed rate increase by year-end jumped to roughly 70-73% from about 50% a day earlier. Risk assets broadly fell — bitcoin dropped (figures ranged from below $61,000 to references near $60,000 depending on snapshot) and gold declined — while the 10-year Treasury yield rose (cited at about 4.54%, up several basis points).

The episode crystallized the window's central tension: resilient US labor data plus an energy-driven inflation impulse removed the Fed's room to ease and forced a violent repricing of the crowded AI trade just ahead of the June 16-17 FOMC meeting.