TL;DR
· The article points out that investors are pulling out of previously high-flying tech stocks and rotating towards other sectors; meanwhile, macroeconomic indicators and geopolitical concerns are weighing down the overall market.
· U.S. May nonfarm payroll data came in stronger than expected, coupled with rising bond yields, sparking speculation about the Federal Reserve potentially raising interest rates, further dampening market performance.
· Influenced by the selloff in tech and AI-related stocks, major indices, especially the Nasdaq 100 Index, saw significant declines. Reasons for the selloff include profit-taking and chip sales outlook falling short of market expectations.
On June 6, 2026, at 07:20 EST, the S&P 500 Index ($$SPX) (SPY) dropped by 1.00%, the Dow Jones Industrial Average ($$DOWI) (DIA) fell by 0.26%, and the Nasdaq 100 Index ($IUXX) (QQQ) declined by 2.08%. The June E-mini S&P Futures (ESM26) dropped by 1.11%, and the June E-mini Nasdaq Futures (NQM26) fell by 2.28%.
The U.S. stock indexes tumbled sharply, with the S&P 500 and Nasdaq 100 hitting two-week lows. Previously, AI infrastructure and semiconductor stocks had driven U.S. indices to historic highs earlier in the week, but now investors are pulling out of these sectors. Due to long liquidation and profit-taking, tech stocks continue to retreat. Broadcom's earlier chip sales outlook failed to meet the market's high expectations, raising concerns among investors: whether the previous rise in AI trading sentiment was overdone.
With the U.S. May nonfarm payroll report beating expectations, bond yields surged, further widening the losses in the U.S. stock indices. This data reinforced speculation in the market that the Fed's next move may be a rate hike. The 10-year U.S. Treasury bond yield rose to a two-week high of 4.54%.
The U.S. added 172,000 jobs in May, higher than the market's expected 88,000 jobs. Additionally, April's nonfarm payroll number was revised up from the previously reported 115,000 jobs to 179,000 jobs. The May unemployment rate held steady at 4.3%, in line with expectations.
The average hourly earnings in the U.S. increased by 0.3% month-over-month in May and 3.4% year-over-year, both in line with expectations.
The crude oil price dropped by over 2%. Meanwhile, negotiations between the U.S. and Iran regarding a temporary peace agreement have made limited progress, and the conflict between Israel and Hezbollah militants in Lebanon continues. Iran insists that Lebanon must achieve a ceasefire before accepting the U.S.' proposal to extend the truce and reopen the Strait of Hormuz. President Trump stated on Thursday that the negotiations with Iran have entered the "final" stage without further elaboration, while Iranian Foreign Minister Abbas Araghchi previously mentioned that although both sides are still exchanging information through the mediator, the talks have not made "substantive progress."
The market currently believes that there is a 3% probability of the Federal Reserve raising interest rates by 25 basis points at the next FOMC meeting on June 16th to 17th.
The overall favorable first-quarter earnings season is coming to a close. As of June 6th, among the 494 S&P 500 companies that have reported Q1 earnings, 83% have exceeded expectations. According to Bloomberg Intelligence, S&P 500 Q1 earnings are expected to grow by 12% year-over-year. Excluding the tech sector, Q1 earnings are projected to increase by only about 3%, the weakest level in two years.
International stock markets are generally down. The Euro Stoxx 50 index fell by 0.56%. The Shanghai Composite Index dropped to a seven-week low, closing down by 0.74%. The Nikkei 225 in Japan fell by 1.31%.
Interest Rates
The September 10-year U.S. Treasury Note futures (ZNU6) fell by 16 ticks, and the 10-year U.S. Treasury Note yield rose by 7.1 basis points to 4.553%. The September U.S. Treasury Note futures price hit a two-week low, with the 10-year bond yield reaching a two-week high of 4.544%. Due to stronger-than-expected job growth in the U.S. in May and a significant upward revision to April's job data, U.S. Treasuries faced downward pressure. This reinforced speculation in the market about the Fed's possible next interest rate hike.
European government bond yields rose. The yield on the German 10-year bond reached a two-week high of 3.051%, currently up by 1.6 basis points to 3.038%. The U.K. 10-year bond yield rose by 0.9 basis points to 4.907%.
The Eurozone's GDP for the first quarter was revised from the previously announced 0.1% growth quarter-on-quarter and 0.8% year-on-year to a 0.2% decline quarter-on-quarter and 0.3% growth year-on-year.
The futures market currently anticipates a 98% probability of the European Central Bank raising interest rates by 25 basis points at its next policy meeting on June 11.
U.S. Stock Market Disruption
Chip manufacturers and AI infrastructure stocks experienced a second consecutive day of decline. Previously, Broadcom's chip sales outlook fell short of the market's high expectations, raising concerns among investors about whether the AI trading frenzy has cooled off. Super Micro Computer (SMCI) dropped over 7%, leading the S&P 500; ARM Holdings Plc (ARM) dropped over 7%, leading the Nasdaq 100. Additionally, ON Semiconductor (ON), Intel (INTC), Marvell Technology (MRVL), and AMD (AMD) all dropped over 6%; Micron Technology (MU), NXP Semiconductors (NXPI), Sandisk (SNDK), Qualcomm (QCOM), and KLA Corp (KLAC) all dropped over 5%. Meanwhile, Lam Research (LRCX), Applied Materials (AMAT), Broadcom (AVGO), ASML Holding (ASML), Texas Instruments (TXN), and Western Digital (WDC) all dropped over 4%.
Cryptocurrency-related stocks saw a sharp decline, with Bitcoin (^BTCUSD) dropping over 4%, hitting a 20-month low. Galaxy Digital Holdings (GLXY) dropped over 11%, MARA Holdings (MARA) dropped over 9%. Additionally, Riot Blockchain (RIOT) dropped over 8%, MicroStrategy (MSTR) dropped over 7%, Coinbase Global (COIN) dropped over 6%.
Mining stocks were sold off, with gold, silver, and copper prices all experiencing significant drops. Coeur Mining (CDE) and Hecla Mining (HL) both dropped over 9%, Southern Copper (SCCO) dropped over 8%. Furthermore, Freeport McMoRan (FCX) and AngloGold Ashanti (AU) both dropped over 6%, Newmont Corporation (NEM) and Barrick Gold Corporation (GOLD) both dropped over 5%.
Guidewire Software (GWRE) dropped over 8%. The company had previously projected fourth-quarter subscription and support revenue to be between $259 million and $265 million, with the midpoint below the market's consensus expectation of $263.6 million.
Lululemon Athletica (LULU) fell over 6%. Earlier, the company lowered its FY2027 net revenue guidance from the previous $113.5 billion to $115 billion to $110 billion to $111.5 billion, below the market's consensus of $114.9 billion.
DocuSign (DOCU) fell over 4%. The company had previously expected a full-year adjusted gross margin of 81.5% to 82%, a figure lower than the market's consensus of 81.8%.
Fiserv (FISV) fell over 3%. Earlier, BNP Paribas downgraded the stock from "Neutral" to "Underperform the Market" with a target price of $46.
G-III Apparel Group Ltd (GIII) rose over 9%. The company had previously raised its FY2027 adjusted EPS guidance from the previous $2.00 to $2.10 to $2.15 to $2.25, higher than the market's consensus of $2.09.
Cooper Companies (COO) rose over 7%, leading the S&P 500. Earlier, the company announced second-quarter net sales of $10.8 billion, beating the market's consensus of $10.5 billion.
ServiceTitan (TTAN) rose over 7%. Earlier, the company reported first-quarter revenue of $2.688 billion, surpassing the market's consensus of $2.567 billion.
Argan (AGX) rose over 6%. Earlier, the company reported first-quarter revenue of $2.91 billion, exceeding the market's consensus of $2.56 billion.
Chipotle Mexican Grill (CMG) rose over 4%. Earlier, JPMorgan upgraded the stock from "Neutral" to "Overweight" with a target price of $35.
Samsara (IOT) rose over 1%. Earlier, the company announced first-quarter revenue of $4.788 billion, beating the market's consensus of $4.552 billion.
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