The S&P 500 and Nasdaq plunged 2.6% and 4.2%, respectively, on Friday, following a strong jobs report that sent the 10-year bond yield above 4.5% and dashed hopes of a Federal Reserve interest rate cut. The declines erased gains from earlier in the week when both indices reached record highs on Tuesday. The sell-off was triggered by the jobs report and compounded by disappointing earnings from chip stocks including Broadcom, which fell 12.6% after reporting lower-than-expected revenue on Thursday. A rotation out of tech stocks into health care and financials produced some gains, with Eli Lilly rising 2.4% and Wells Fargo gaining 5.7% for the week. The S&P 500 snapped a nine-week winning streak.
Tech Stocks Decline After Earnings Reports
Palo Alto Networks shares fell 5.6% on Wednesday after the company reiterated its long-term financial outlook instead of raising it, despite delivering a beat-and-raise quarter. The stock had reached a record high on Monday. For the week, Palo Alto fell 3.4%. CrowdStrike reported better-than-expected earnings and forward guidance on Wednesday evening but fell more than 8% for the week after initial declines of more than 10% on Thursday. Broadcom fell 12.6% after earnings on Thursday due to lower-than-expected revenue in the reported quarter, despite strong AI-related business performance. Management forecasted continued AI semiconductor revenue growth in fiscal 2028. Broadcom lost 13.7% for the week. Intel lost 13.5% for the week. Nvidia declined 2.9% for the week.
Nvidia CEO Announces PC Market Entry at Computex
Nvidia CEO Jensen Huang announced on Monday at the Computex conference in Taiwan that Nvidia is entering the personal computer market with chips based on Arm Holdings' architecture. Arm Holdings shares rose 15.7% on Monday following the announcement but fell 3% for the week. Arm shares are up 213% year to date. On Tuesday, Huang predicted that Marvell Technology would be the "next trillion-dollar company." Marvell shares gained more than 28% for the week. Before the comments, Marvell had a market cap of nearly $200 billion.
SpaceX and Anthropic Disclose IPO Plans
SpaceX disclosed plans on Wednesday to sell 555.6 million shares at a fixed price of $135 each, raising roughly $75 billion at a $1.8 trillion market value. The company is set to start trading this coming Friday. Anthropic confidentially filed its IPO prospectus on Monday. The company recently closed a funding round that valued the startup at $965 billion. OpenAI is readying plans for a public market listing and was recently valued at $852 billion post-money. Alphabet announced plans to sell $85 billion in stock to fund its AI buildout. Alphabet shares fell almost 4% on Tuesday following the announcement and lost 3% for the week. Meta Platforms lost more than 6% for the week after the Financial Times reported that the company could potentially raise tens of billions of dollars in a stock offering to fund its AI push.
FAQ
What caused the S&P 500 to fall on Friday?
The S&P 500 fell 2.6% on Friday after a strong jobs report sent the 10-year bond yield above 4.5% and reduced expectations for a Federal Reserve interest rate cut. Chip stocks also declined following disappointing earnings reports earlier in the week.
How much did Broadcom fall after its earnings report?
Broadcom fell 12.6% after reporting earnings on Thursday due to lower-than-expected revenue in the reported quarter. The stock lost 13.7% for the week, making it one of the worst-performing stocks during the period.
What IPO plans did SpaceX announce?
SpaceX disclosed plans to sell 555.6 million shares at $135 each, raising roughly $75 billion at a $1.8 trillion market value. The company is set to start trading this coming Friday.
