Nasdaq plunges 4.2% on stronger-than-expected May jobs data
In brief
- Nasdaq Composite fell 4.2%, worst session since April 2025
- May jobs report: 172,000 positions added, nearly double 80,000-90,000 estimate
- Strong employment data increases probability of Federal Reserve rate hikes
- Bitcoin fell 3.9% to $61,156; Ether dropped 10% to $1,598
- Bitcoin-treasury stocks like Tesla and Marathon Digital declined more than crypto
Jobs Data Triggers Broad Retreat
US nonfarm payrolls added 172,000 jobs in May, against consensus estimates in the range of 80,000 to 90,000. Unemployment held steady at 4.3%. The stronger-than-expected data sent a chill through markets already wrestling with inflation concerns. The 10-year Treasury yield climbed in response to the jobs figures, signaling investor expectations of tighter monetary policy ahead.
The sell-off was broad. The S&P 500 saw nearly $1.3 to $1.4 trillion in market value evaporate in a single session. Tech took the heaviest blow. Nvidia, the poster child of the AI investment boom, dropped about 6%, and chipmakers collectively lost over $1.3 trillion in market value.
AI Valuations Under Pressure
Nvidia's decline reflected something deeper than rate-hike anxiety. Growing unease about whether AI revenue can justify current valuations in a tighter monetary environment weighed on the stock. Investors questioned whether the AI boom's economics could withstand higher borrowing costs.
Crypto assets suffered too. Bitcoin fell approximately 3.9% to around $61,156, while Ether experienced a sharper correction, dropping nearly 10% to roughly $1,598. But the real story lay elsewhere.
Bitcoin-Treasury Stocks Hit Harder
Strategy (the company formerly known as MicroStrategy), Tesla, and Marathon Digital have collectively lost around $62 billion in market capitalization since their peak in early October 2025. Their combined valuation dropped from about $134 billion to approximately $72 billion. These "Bitcoin treasury" stocks fell harder than Bitcoin itself, which tells you something about how the market views leveraged exposure to crypto in a risk-off environment.
The divergence matters. It shows investors are shedding not just crypto exposure, but leveraged bets on crypto. In a world of rising rates, that's a rational trade.
