US Stocks Lose About $650B As Nasdaq And Chip Names Lead Selloff

U.S. stocks sold off hard on Friday as stronger labor data hit rate-cut hopes and pushed traders out of the same tech and AI names that carried the latest rally.

The S&P 500 fell 0.62% at the open to 7,537.36, while the Nasdaq Composite dropped 1.10% to 26,536.593. The Dow initially opened slightly higher, but the broader tone turned risk-off as tech, chips, small caps and crypto-linked equities came under heavier pressure.

The original $510 billion wipeout figure was reasonable as a broad-market estimate at the open, but the live move became larger as the session developed. With S&P 500 total market capitalization near $67.8 trillion, the live SPY move of roughly 0.96% lower points to about $650 billion in S&P 500-level market value erased during the early trading window.

That makes Friday’s selloff less about one weak index print and more about a sudden repricing across high-duration risk assets. Nasdaq and small-cap exposure were hit harder than blue chips, showing that traders were cutting the most rate-sensitive and momentum-heavy parts of the market first.

Strong Jobs Data Hits Rate-Cut Hopes

The pressure accelerated after U.S. payrolls increased by 172,000 in May, while unemployment stayed at 4.3%. Job gains were led by leisure and hospitality, local government and health care, while financial activities declined.

A stronger labor market normally looks healthy, but Friday’s market reaction was about policy. A resilient jobs report gives the Federal Reserve less pressure to cut rates quickly, especially while investors are already worried about inflation, energy prices and stretched AI valuations.

That shift hits growth stocks first because their valuations depend heavily on future earnings being discounted at lower rates. If rate-cut expectations weaken, the most expensive parts of the market lose support fastest.

AI, Chips And Retail Take The Bigger Hits

The biggest damage was concentrated in chip, AI and momentum-linked names. Live market checks showed Arm down about 8.7%, Marvell down 8.4%, Lululemon down 7.7%, AMD down 6.3%, Nvidia down 2.4% and Broadcom down 3.9%.

Crypto-linked equities were also hit. Strategy fell about 5.5%, while Coinbase dropped roughly 5.1%. That matters because both names often trade like leveraged expressions of Bitcoin and broader risk appetite. When equity traders cut exposure to high-beta assets, crypto-linked stocks usually feel the pressure before spot crypto stabilizes.

The selloff also shows how narrow the market’s recent strength had become. AI infrastructure, chip demand and megacap tech carried much of the upside. Once those names started slipping, the headline index loss quickly translated into hundreds of billions of dollars in erased market value.

Crypto Feels The Same Liquidity Squeeze

The U.S. stock selloff is landing directly into an already weak crypto tape. The broader crypto market recently lost $635 billion in less than a month, while spot Bitcoin ETFs suffered a record 13-day outflow streak before the latest equity stress.

That creates a dangerous setup for Bitcoin and altcoins because liquidity is being pulled from both sides. Equity traders are reducing exposure to AI and growth, while crypto traders are already dealing with ETF redemptions, forced liquidations and weak spot demand.

Bitcoin has also slipped in the global asset rankings after its latest drawdown, with BTC recently falling to 14th among global assets by market cap. A deeper equity selloff would add another layer of pressure because crypto is still trading like a high-beta liquidity asset, not a detached macro hedge.