Eastern Time on June 5th (Friday), the Nasdaq Composite Index closed sharply down by 1121.53 points, a drop of 4.18%, closing at 25709.43 points, the largest single-day decline since the tariff shock in April 2025; the S&P 500 fell by 2.64%, and the Dow Jones Industrial Average dropped by 1.35%, with all three major indices collapsing.

The immediate trigger was the significantly better-than-expected U.S. non-farm employment data for May. The U.S. Department of Labor announced that 172,000 non-farm jobs were added in May, far exceeding market expectations of 80,000–90,000, and the data for March and April were revised upward by more than 90,000, with the unemployment rate remaining steady at 4.3%. The hot employment report completely shattered market expectations of Fed rate cuts within the year — the CME FedWatch tool showed the implied probability of a 25 basis point rate hike by the end of the year rising sharply from about 48% to over 60%, and the 10-year U.S. Treasury yield jumped above 4.55%. The rise in risk-free rates directly suppressed the discounted value of future cash flows of high-valuation tech growth stocks, triggering a capital flight.

At the individual stock and sector level, AI and semiconductor stocks experienced a "stampede-like" sell-off. The Philadelphia Semiconductor Index plummeted over 10% in a single day, Nvidia fell 6.2% (market cap evaporating about $328 billion), Broadcom dropped 7.9% (after a previous day’s 12% plunge due to AI guidance missing the highest expectations), Micron, ARM, Intel, and AMD all fell more than 10%–13%, Meta declined 5.5%, and Tesla fell 6.5%. Previously, tech and chip stocks had risen for nine consecutive weeks, with high crowding and valuation levels, making them vulnerable to any negative news triggering programmed stop-losses and long liquidation.

Currently, market divergence exists: some institutions believe this is a healthy correction after overheating, and the AI industry trend has not been disproved; another camp warns that if subsequent inflation data remains strong and the Fed officially removes its dovish language, the high-interest-rate environment will continue to suppress the valuation center of the Nasdaq. In the short term, attention should be paid to next Thursday’s CPI data and the Fed’s June policy statement; if rate hike expectations further solidify, tech stocks still face downside risk. The Asia-Pacific markets are expected to be affected by sentiment transmission at Monday’s open, with A-shares semiconductor and Hong Kong Hang Seng Tech sectors needing to watch out for downward opening pressure.