---
title: "AI stocks suffer steep losses after surprising jobs data"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/288910829.md"
description: "AI stocks plummeted as a strong jobs report fueled fears of Fed rate hikes, causing major indexes to drop sharply. The Nasdaq 100 fell 4.7%, with AI-related firms like Marvell and AMD leading declines due to higher borrowing cost concerns. Despite the sell-off, year-to-date gains remain positive. Market volatility persists as investors weigh economic data against monetary policy expectations and upcoming high-profile IPOs."
datetime: "2026-06-05T22:35:35.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/288910829.md)
  - [en](https://longbridge.com/en/news/288910829.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/288910829.md)
---

# AI stocks suffer steep losses after surprising jobs data

Wall Street endured a difficult trading session as a stronger than expected jobs report reignited concerns that the Federal Reserve could raise interest rates later this year, sending major stock indexes sharply lower and hitting technology companies especially hard.

The sell off was most pronounced among firms tied to artificial intelligence, a sector that has fueled much of the market’s gains in recent years. Investors worried that stronger economic growth could prompt policymakers to maintain a tighter monetary stance, increasing borrowing costs for companies that depend heavily on financing to support expansion and innovation.

The technology heavy Nasdaq 100 dropped 4.7%, marking its steepest daily decline since April 2025 and its worst weekly performance since March 2025. The broader market also struggled, with the S&P 500 falling 2.6% and the Dow Jones Industrial Average shedding 694 points.

### **Why investors reacted to the jobs report**

Strong employment figures are often viewed as a sign of economic health. However, they can also create concerns that inflationary pressures may remain elevated, reducing the likelihood of interest rate cuts and increasing the chances of future hikes.

Higher interest rates typically weigh on stocks because they raise borrowing costs for businesses and make future earnings less attractive to investors. Growth oriented technology companies are often among the hardest hit because many rely on significant capital investments to fund research, infrastructure and expansion.

Government bond yields climbed following the jobs report, reaching their highest levels since late May. Rising yields can influence borrowing costs throughout the economy, affecting everything from corporate financing to consumer loans.

### **7 major AI-related stocks led the decline**

Several companies connected to the AI boom suffered double digit losses as investors reassessed risk across the technology sector.

Among the hardest hit stocks were:

Marvell

Arm

Micron

SanDisk

Intel

AMD

Qualcomm

Each of these companies plays an important role in the semiconductor and technology ecosystem that supports AI development. As concerns about higher rates intensified, shares of these firms fell sharply, contributing significantly to the Nasdaq’s decline.

### **Market remains near record highs**

Despite Friday’s dramatic pullback, major indexes continue to post solid gains for the year.

The S&P 500 remains up roughly 8% in 2026, while the Nasdaq has gained close to 10% year to date. Those figures suggest that investors still maintain confidence in the long term growth outlook for technology and AI, even as short term volatility increases.

Many analysts view the recent decline as a reminder that markets remain highly sensitive to economic data and Federal Reserve policy expectations.

### **IPO activity adds another layer of uncertainty**

Investor attention is also turning toward several highly anticipated public offerings expected to reach the market this year.

SpaceX is scheduled to begin trading on the Nasdaq next week and is reportedly seeking to raise approximately $75 billion. The company is expected to carry a valuation exceeding $1.7 trillion, making it one of the largest public offerings ever.

The aerospace company is joined by AI firms Anthropic and OpenAI, both of which are pursuing major fundraising efforts and could become some of the year’s most closely watched IPOs.

The arrival of multiple trillion dollar offerings has prompted debate among investors about whether current valuations accurately reflect business fundamentals and long term growth prospects.

### **Tech giants feel the pressure**

The selling spread beyond smaller AI focused firms and reached some of the biggest names in technology.

Broadcom shares fell 7% after an earnings report that disappointed investors, bringing its weekly decline to more than 13%. Nvidia, currently the world’s largest publicly traded company by market value, lost about 6%.

Oracle experienced a 10% decline, while IBM dropped roughly 7%. Companies benefiting indirectly from the AI boom also came under pressure. Caterpillar, whose equipment is often used in large scale data center construction projects, saw its shares fall nearly 4%.

Additional concerns emerged after reports indicated that Meta Platforms was considering a significant stock offering to strengthen its AI investments. The news pushed Meta shares down more than 6%.

### **What comes next for investors**

Market participants are now closely monitoring Federal Reserve policy expectations. Futures markets currently indicate a roughly 60% probability of an interest rate increase by the Fed’s October meeting.

Some economists believe policymakers could begin reversing previous rate cuts later this year if economic growth and labor market strength continue to exceed expectations.

For investors, the latest sell off underscores how quickly sentiment can shift when economic data alters expectations for monetary policy. While the broader market remains in positive territory for the year, technology and AI stocks could continue facing heightened volatility as traders evaluate the path of interest rates and the sustainability of lofty valuations.

### Related Stocks

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