PiCK
Trump Questions Selloff as Strong Jobs Data Fuels Rate Fears, Nasdaq Drops 4.18%
Summary
- The U.S. stock market fell sharply as stronger-than-expected jobs data fueled fears of an interest-rate hike, sending the Nasdaq Composite, semiconductor shares, and the Philadelphia Semiconductor Index lower.
- Large equity offerings by Big Tech companies including Alphabet and Meta, along with AI-related fundraising, added downward pressure on the market, reinforcing the view that technology shares are in a correction phase.
- Warnings of market overheating are mounting over excessive expectations for AI demand, concern that the SpaceX valuation is inflated, and profit-taking in semiconductors.
Forecast Trend Report by Period
U.S. stocks, which had been led higher by technology shares such as artificial intelligence and semiconductor names, tumbled on June 5. Better-than-expected jobs data stoked concern that the Federal Reserve could keep interest rates higher for longer, while a string of capital-raising moves by major Big Tech companies also weighed on sentiment.
The Nasdaq Composite closed at 25,709.43, down 4.18% from the previous session. Semiconductor stocks led the slide for a second straight day, with Nvidia down 6.20% and Broadcom off 7.92%. The Philadelphia Semiconductor Index sank 10.26%.
The decline followed a report showing 172,000 new jobs were added last month, more than double forecasts of about 80,000. That heightened concern that the Fed may not cut rates and could instead keep them at elevated levels through year-end. The Nasdaq fell 4.7% for the week, its steepest weekly drop in more than a year. The S&P 500 lost 2.6% on the day, falling short of a 10th straight weekly gain.
Big Tech companies' moves to raise money for AI-related investment also added downward pressure. The Financial Times reported that Meta is pursuing a multibillion-dollar equity offering after Google parent Alphabet moved to launch an $85 billion share sale.
Warnings about an overheated market have also mounted. Broadcom Chief Executive Officer Hock Tan said expectations for AI demand were excessive. Concerns that SpaceX's $1.78 trillion valuation ahead of its June 12 listing is inflated also fed into the retreat. Louis Navellier, founder of Navellier & Associates, told Bloomberg the market is entering a sharp correction in technology shares. Profit-taking appears to be emerging in semiconductors.
President Donald Trump said he had difficulty understanding the market's sharp decline. In a social media post, he wrote that a strong jobs report should send stocks higher, not lower, and added that growth does not necessarily mean inflation.
Lee Sang-eun, Washington correspondent, Korea Economic Daily, selee@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
