On June 5, the Nasdaq Composite fell 4.18% to close at 25,709.43 — its worst single-session decline since April 2025. The S&P 500 shed 2.64%, settling at 7,383.74, while the Dow Jones slipped 1.35% to 50,866.78. The catalyst was a convergence of two shocks: a blowout May employment report from the BLS and a muted AI outlook from semiconductor bellwether Broadcom that triggered a $1 trillion sector wipeout. European equities, already exposed to the same AI rotation trade, closed mixed but saw their chip names fall sharply.
US Markets: Semiconductors Crushed, Rate-Cut Hopes Dashed
Non-Farm Payrolls: 172K vs. 80K Expected
The Bureau of Labor Statistics’ May 2026 employment situation report landed at 8:30 AM ET with a number nearly double consensus: the US economy added 172,000 non-farm payroll jobs against an expected 80,000, while the unemployment rate held at 4.3%. Leisure and hospitality alone contributed 70,000 — well above its recent monthly average of 14,000.
The bond market moved instantly. The 10-year US Treasury yield surged 6 basis points to 4.544%, its highest since May 21. The 2-year rose 11 basis points to 4.162%, and the 30-year breached 5.007% — according to CNBC’s live Treasury coverage. With the labor market this resilient, the odds of at least one Fed rate hike by year-end climbed to 70% via the CME FedWatch tool, effectively closing the door on near-term cuts.
For a deeper look at how Non-Farm Payrolls typically move markets and what the May print signals, see ECONPLEX’s NFP guide.
Broadcom’s Flat AI Forecast: The $280B Shock
Broadcom (AVGO) had reported Q2 fiscal 2026 results on June 3: AI semiconductor revenue hit $10.8 billion (+143% year-over-year), total revenue reached $22.2 billion (+48% YoY) — by any measure, extraordinary growth. But the company held its full-year AI revenue guidance unchanged at “in excess of $100 billion,” leaving no room for the upward revision markets had priced in. CEO Hock Tan also mentioned that Google may seek to diversify its chip supply chain.
The result: AVGO fell roughly 15%, erasing close to $280 billion in market value in a single session (TheStreet). The Philadelphia Semiconductor Index (SOX) collapsed more than 10%. Micron Technology and AMD each lost 6.3%; Marvell Technology fell 8% (TradingKey).
A secondary stock offering from Meta added further pressure on tech broadly, extending the selloff beyond the chip sector.
US Market Snapshot — June 5, 2026
| Index | Close | Change |
|---|---|---|
| S&P 500 | 7,383.74 | −2.64% |
| Nasdaq Composite | 25,709.43 | −4.18% |
| Dow Jones | 50,866.78 | −1.35% |
| SOX (Philly Semi) | — | >−10% |
European Markets: Tech Contagion, FTSE Holds Ground
European equities entered Friday already cautious. InvestingLive’s pre-close wrap described “a mixed mood” as investors balanced the AI trade reassessment against geopolitical uncertainty ahead of US payrolls. When the session ended, the picture was split along sector lines.
The STOXX 600 closed −0.25%, while its Technology sub-index dropped 2.8% — the sharpest sectoral decline of the day (CNBC European markets wrap):
- Infineon Technology: −9.1%
- Nokia: −5.9%
- ASML: −2.4%
The FTSE 100 edged +0.1%, outperforming continental peers. Its heavier weighting in energy, financials, and consumer staples provided a natural buffer against the AI-driven selloff hitting Paris, Frankfurt, and Milan.
Shared Macro Forces Behind Both Markets
Three threads connected the US and European moves:
- Rate path re-pricing. A labor market adding 172K jobs a month gives the Fed no reason to cut rates. Higher-for-longer US rates raise the risk-free rate globally, compressing the relative appeal of high-multiple growth stocks everywhere.
- The AI capex paradox. Broadcom’s 143% AI revenue growth — combined with flat guidance — crystallized a growing market concern: that AI infrastructure spending may not translate fast enough into earnings upgrades to justify current valuations. Analysts have started referring to this as the “AI capex paradox.”
- Yield pressure on duration. With the 30-year Treasury above 5%, the yield curve is reasserting pressure on long-duration equities — the same growth and tech names that led the rally through May.
What Asia and Korea Should Watch on Monday, June 8
- Fed rate outlook: Any Fed official statement or interview over the weekend could set the tone. A hawkish comment reinforcing the rate-hike odds would hit Asian tech at the open.
- Semiconductor earnings pipeline: Investors will scrutinize whether Broadcom’s flat AI-guidance caution is company-specific or a sector-wide signal heading into the next earnings cycle.
- US futures: Monday’s open in ES/NQ futures will show whether the May NFP shock has been fully digested or continues to weigh.
- VIX: Watch whether volatility spikes above 20 — a level that historically signals broadening risk-off behavior.
- Dollar strength (DXY): A hot jobs print typically lifts the dollar. Sustained USD strength will pressure Asian export-oriented equities and emerging market assets.
Track the Fed rate path, the latest NFP data, and all upcoming market-moving releases in one place — open the ECONPLEX Economic Calendar to stay ahead of the next catalyst.