Tech and artificial intelligence-related stocks were hammered Friday after a stronger-than-expected jobs report set off a selling spree on Wall Street.
Employers added 172,000 jobs in May, according to the U.S. Department of Labor. The figure reported Friday was roughly double what forecasters expected, showing a sharp recovery in hiring from last year. But the strong report signaled to investors that the Federal Reserve likely won’t cut interest rates this year and may raise them.
The prospect of higher rates is a bad sign for AI companies, especially those that are investing heavily in the expensive technology’s infrastructure and aren’t profitable yet. To build data centers and manufacture high-tech computer chips, many AI-related companies are heavily indebted and raising money to fuel their growth. Higher rates and possible inflation could hamper that long-term growth.
While companies like Amazon and Microsoft are investing hundreds of billions into AI, they still report quarterly profit growth and free cash flow, making them less vulnerable to higher interest rates than a company like Oracle, which is leveraging more and more debt to invest in AI.
Wall Street began selling off stocks Friday, especially in the tech sector. In response to the report and the market’s drop, President Donald Trump posted on social media that “With a great Jobs Report, like just announced, stocks should go up, not down. … Growth does not mean inflation!”
The tech-heavy Nasdaq composite index was especially clobbered, falling by more than 1,100 points and suffering its worst day since April 2025, when Trump announced sweeping tariffs that disrupted the market. Unlike other major market swings since Trump returned to office, though, the White House had little to do with Friday’s dip.
Driving the Nasdaq’s losses were stocks from AI chipmakers like Nvidia, which was down 6.2% when the market closed; Micron, which was down 13.2%; Broadcom, which was down 7.9%; AMD, which was down 10.9%; and Marvell, which was down 16.7%.
Other tech stocks dragged down the market as well, though not as drastically as the chipmakers. It was also a mixed bag among the top tech companies. Google parent company Alphabet’s share price fell by less than 1% while Meta’s stock plunged midday and ended the afternoon down by 5.5%.
Microsoft fell by almost 2.7% on the day, with Amazon down 3%. Both companies are coming off strong financial results for the first quarter of the year, even as investors start to worry about the continued costs of AI development.
Microsoft has had an especially tough year on Wall Street and is down 11.9% from the start of the year.
But Friday’s market turmoil comes after months of surges for many tech companies. Amazon and Nvidia are both still up 8.6% from the start of the year. One of the day’s biggest losers, AI chipmaker Marvell, is up 194.7% on the year.
Friday’s sell-off was preceded earlier this week by AI-related concerns after Broadcom’s earnings report. The chipmaker reported that it was expecting more than $100 billion in AI revenue for its fiscal 2027 year, but investors had anticipated higher guidance and began selling off the stock over worries that AI demand was slowing.
Broadcom’s stock price plunged Wednesday, recovered slightly Thursday and fell again Friday.
William Kerwin, an analyst for Morningstar, wrote in an investors’ note Thursday that Broadcom’s stock decline earlier this week was an overreaction to conservative guidance.
