Nasdaq Falls 4.2% as Chip Stocks Plunge
SkimNews Take
The chip sector's broad decline, even impacting AI stocks, suggests market concerns extend beyond individual company performance to the foundational components of future tech growth, potentially reflecting broader economic anxieties.
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Nasdaq fell 4.2% on Friday, its worst session in 14 months, after a stronger‑than‑expected May jobs report lifted bond yields.
- Chip stocks such as Broadcom, Nvidia, Marvell, Micron, Intel and AMD fell sharply, with Broadcom down >13% weekly and Nvidia down 6.2% falling below a $5 trillion market cap.
- Fed officials noted that AI‑related investment is boosting demand for labor, equipment and infrastructure, raising inflation risks as higher yields increase financing costs for AI firms.
- Sen. Bernie Sanders proposed a 50% U.S. government ownership stake in major AI companies, echoing recent talks between OpenAI CEO Sam Altman and senior Trump officials.
- Meta considered selling shares to fund its massive AI build‑out, according to the FT.
- Nasdaq remained up 10.6% YTD, with Nvidia and Broadcom each up over 10% despite the recent pullback.
Why it matters: Chip investors face sharp losses as stocks tumble, while the Nasdaq’s 10.6% YTD gain shows broader market resilience; higher bond yields raise financing costs for AI firms, and officials are actively discussing government ownership of AI companies, highlighting a shift in funding dynamics.
