U.S. stocks tumble as hot jobs data rekindles valuation anxiety in Big Tech and AI
U.S. equities suffered a broad selloff after a stronger-than-expected May jobs report jolted rate expectations and intensified worries that Big Tech and AI valuations are stretched.
The Nasdaq Composite slid about 4.2% for its worst single-session drop since April 2025. The S&P 500 fell 2.6% and the Dow Jones Industrial Average lost roughly 1.4%. Roughly $1.3 trillion to $1.4 trillion in market value was wiped from the S&P 500, with the heaviest pressure concentrated in mega-cap technology and AI-linked names.
Nonfarm payrolls rose by 172,000 in May, nearly double consensus forecasts of 80,000 to 90,000. The unemployment rate was unchanged at 4.3%. The data pushed investors to reprice the path for monetary policy, reviving speculation the Federal Reserve could raise rates later this year. The 10-year Treasury yield moved higher as markets adjusted.
AI bellwether Nvidia fell about 6%. Chipmakers were hit hard, with the group losing more than $1.3 trillion in market capitalization.
Crypto assets also retreated. Bitcoin declined about 3.9% to around $61,156, while Ether dropped nearly 10% to roughly $1,598. Strategy (formerly MicroStrategy), Tesla and Marathon Digital have shed roughly $62 billion in market value since their early-October 2025 peak, with their combined valuation falling from about $134 billion to approximately $72 billion. These so-called "Bitcoin treasury" stocks fell more than Bitcoin itself, highlighting how quickly leveraged crypto exposure can be repriced in a risk-off tape.
For investors, the pullback in Nvidia underscored more than rate sensitivity. It reflected growing skepticism over whether AI-driven revenue can support current multiples in a tighter policy backdrop. The widening performance gap between Bitcoin and the equities that hold it is another signal to watch. When Strategy declines faster than the asset it is meant to track, markets may be discounting added risks such as forced selling, dilution, or the evaporation of premium valuations during downturns.
