Overview
- Following Friday's jobs report that showed U.S. payrolls rose by 172,000, major indexes tumbled with the Nasdaq down about 4.2% and the S&P 500 down about 2.6%, ending the S&P’s nine-week winning streak.
- Treasury yields jumped, with the 10-year near 4.54–4.55%, and traders materially increased the probability of a year-end or late-year Fed rate hike according to CME FedWatch pricing.
- The sell-off was led by semiconductor and AI-related names after Broadcom issued softer guidance, sending the PHLX Semiconductor Index down roughly 10% and erasing about $1.0–1.3 trillion in chipmaker market value over two sessions.
- Risk assets sold together as Bitcoin briefly fell below $60,000 and gold and other traditionally safer holdings also slipped, showing heightened cross-asset correlation as investors pulled money from high-beta positions.
- Near-term focus will be on corporate earnings and guidance, upcoming Fed commentary, and developments in the Middle East that keep oil and inflation risks elevated, with higher yields likely to push up borrowing costs for households and businesses.