① U.S. equities suffered heavy selling on Friday, with the Nasdaq 100 Index dropping 4.2%, the Philadelphia Semiconductor Index falling by more than 10%, Bitcoin prices slipping below $60,000, and spot gold erasing all of its gains for the year; ③ Wall Street analysts primarily interpreted this turmoil from three perspectives: how the Federal Reserve’s policy stance might shift this year, whether the tech stock bull market has run its course, and why investors are pulling back capital.
Caixin News, June 6 (Editor Ma Lan) — U.S. stocks experienced a brutal sell-off on Friday, with all three major indices posting losses. The tech-heavy Nasdaq 100 Index declined by 4.2%, while the Philadelphia Semiconductor Index plunged by over 10%.
Meanwhile, Bitcoin prices fell below $60,000, and spot gold erased all of its gains for the year. The yield on the U.S. 10-year Treasury note rose to 4.55%, while the two-year Treasury yield hit its highest level since February 2025. Additionally, the CBOE Volatility Index (VIX), often referred to as Wall Street’s ‘fear gauge,’ surged by 40%, reaching its highest level in two months.
Technology stocks were the primary casualties of this sell-off. According to data, the nine U.S.-listed companies with market capitalizations exceeding $1 trillion collectively lost $1.1 trillion in market value on Friday, with an average share price decline of 5.3%. Artificial intelligence leaders such as NVIDIA, Micron Technology, and AMD saw particularly steep losses, triggered by Broadcom’s weak earnings report earlier in the week, which sent shockwaves through Wall Street.
Beyond Broadcom, strongnon-farm payroll dataundermined market confidence in the Federal Reserve cutting rates this year, abruptly shifting the pricing narrative from an easing cycle to a tightening path—a key factor further weighing on risk assets, digital currencies, and precious metals prices.
Another perspective suggests that the impending mega IPO of SpaceX also contributed to this sell-off, as investors reallocate capital to position themselves for the offering.
Regarding this sharp market drop, Wall Street analysts hold divergent views and have offered slightly differing outlooks.
Is the bar for Fed rate hikes still high? Next week’s CPI data could be pivotal.
Christopher Hodge, Chief U.S. Economist at Natixis CIB Americas:
The threshold for further rate hikes remains very high, given sluggish wage growth in the U.S. labor market, elevated productivity, and still-anchored inflation expectations. This indicates a stable—but not overheated—labor market. Currently, the labor market is in a sweet spot: fundamentally sound without exerting additional upward pressure on inflation.
Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management:
Rate hikes are not yet a done deal in the market, but the likelihood of rate cuts this year is low. With inflation so high, the Federal Reserve cannot cut rates, but if inflation remains contained—particularly amid heightened tensions in the Strait of Hormuz—they won’t feel pressure to raise rates either.
Ron Temple, Chief Market Strategist at Lazard:
Friday’s strong jobs report has effectively eliminated any remaining hope for a Fed rate cut, though he still believes the probability of a rate hike is low. However, next week’s May inflation report could show headline CPI inflation exceeding 4%, which would undermine the case for monetary easing.
David Donabedian, Senior Investment Strategist at Canadian Imperial Bank of Commerce Private Wealth:
Investors should be cautious when the 10-year U.S. Treasury yield remains persistently above 4.5%. Market participants will closely watch next week’s CPI data; if headline CPI rises above 4% and core CPI approaches 3%, combined with strong employment figures, it will become very difficult for the Fed to consider rate cuts.
Andrew Hollenhorst, Chief U.S. Economist at Citigroup:
Tech stocks are overbought—is this a healthy pullback?
Daniel O’Regan, analyst at Mizuho Securities:
Daniel O’Regan, analyst at Mizuho Securities:
The S&P 500 Index, Nasdaq 100 Index, and Philadelphia Semiconductor Index are all significantly overbought. Positions are crowded yet dispersed—this is what market normalization looks like. From a broader perspective, today's selloff has merely brought investors back to levels seen just a few weeks ago.
Alex King, CEO of Cestrian Capital Research:
On Friday, the S&P 500 and Nasdaq indexes fell to their lowest levels in two weeks. Investors should view this pullback through the lens of risk management rather than succumb to panic. Disciplined investors should focus on identifying attractive opportunities once selling pressure begins to ease.
Louis Navellier, Chief Investment Officer at Navellier & Associates:
Investors appear to be taking profits, particularly in the semiconductor sector, and bargain hunters have not yet stepped in. However, the overall trend remains positive, and there is still hope that the Iran issue will be resolved in the near term.
Ohsung Kwon, Chief Equity Strategist at Wells Fargo & Co:
Friday’s market reaction was driven more by position adjustments than by fundamentals. The semiconductor sector was severely overbought, which explains the selloff—but he does not believe this marks the end of the semiconductor bull market.
Anthony Saglimbene, Chief Market Strategist at American Express:
The labor market remains strong, and the long-term tailwinds from artificial intelligence persist, but the market is undergoing a period of rational adjustment—which is healthy from a longer-term perspective.
Nicolas Forest, Chief Investment Officer at Candriam:
Capital has become heavily concentrated in AI and semiconductor themes, raising an obvious concern: if investors grow wary or disappointed about performance in the artificial intelligence sector, it will be difficult to remain optimistic about risk assets.
Major IPOs are coming next week—should investors pull back liquidity first?
Peter Tuz, President of Chase Investment Counsel Corporation:
Friday’s market action extended Thursday’s decline triggered by Broadcom. Broadcom reported outstanding quarterly results, but its forward guidance fell short of expectations. Investors are now speculating whether this could spill over to other chipmakers and related companies. Additionally, a wave of IPOs starting next week may introduce further market risks, which is cause for concern.
Carol Schleif, Chief Market Strategist at BMO Private Wealth:
Part of the sell-off stems from interest rates, but another part reflects investors temporarily setting aside capital in anticipation of upcoming IPOs. Technology stocks have remained strong, with gains of nearly 10% over the past three months. A modest pullback now is reasonable.
Michael Kramer, Founder of Mott Capital Management:
Alphabet’s recent equity issuance, coupled with reports that Meta may follow with a large-scale equity offering, has raised some concerns. Over the next few quarters, these companies will face a dilemma: either take on debt or issue more shares to meet spending requirements, or cut capital expenditures—neither of which bodes well for their stock prices.
Editor/KOKO