An index of semiconductors fell 3.6 percent, with Nvidia and Broadcom among the biggest drags on the S&P 500. Investors have been worried about stretched valuations in the group. The S&P 500 technology sector ended down 11 percent from its June 2 record high close, confirming a correction.
The Cboe Volatility Index, Wall Street’s fear gauge, added to recent gains.
Investors were still taking some profits in the tech space, said Tom Hainlin, an investment strategist at US Bank Wealth Management in Minneapolis. Also, investors are now “pricing in maybe a higher interest rate” after recent economic data and are also worried about the war, he said.
“Perhaps that conflict continues on into the mid to late summer,” he said.
Adding to the down move, shares of trucking companies XPO , JB Hunt and Old Dominion fell after Amazon announced expansion of its less-than-truckload freight services in the US Industrials dropped 3.4 percent, leading sector decliners.
The Dow Jones Industrial Average fell 953 points, or 1.9 percent, to 49,918, the S&P 500 lost 119 points, or 1.6 percent, to 7,266 and the Nasdaq Composite lost 509 points, or 2 percent, to 25,169.
The Federal Reserve is widely expected to hold interest rates steady at its June policy meeting. Investors are pricing in at least one 25-basis-point rate hike by the end of the year.
Friday’s US jobs report was stronger than expected. On Wednesday, US consumer prices increased 4.2 percent in the 12 months through May, the largest gain since April 2023, data showed, as the Middle East conflict raised the price of gasoline and other energy products.
After the closing bell, Oracle shares were down about 1 percent following the release of its results. During the regular session, Super Micro Computer tumbled 28 percent after it announced plans to raise US$7 billion through a series of equity and equity-linked financing transactions to fund component purchases for its growing AI server demand. (Reuters)