Nasdaq tumbles 4% as jobs data revives rate-hike fears, Bitcoin drops below $60K
In brief
- Nasdaq Composite fell 4% on June 5, worst single-day performance in over a year
- Nvidia dropped 6%, Broadcom fell 8%, Micron plummeted 13% during selloff
- Bitcoin slid below $60,000 as risk-off sentiment swept across asset classes
- Stronger-than-expected jobs data triggered Federal Reserve rate-hike expectations
- Higher interest rates increase capital costs for AI data center buildouts
AI stocks bear the brunt
The decline hit semiconductor and AI-adjacent stocks hardest. Nvidia dropped around 6%, Broadcom fell nearly 8%, and Micron plummeted roughly 13% as investors reassessed the economics of AI infrastructure spending. A widely held memory-chip ETF declined approximately 15%, underscoring the depth of the repricing.
Micron's collapse is particularly telling. Memory chips are the foundational input for AI data centers — the picks-and-shovels play of the boom. When those companies get hammered, it signals more than sector rotation. It signals doubt about whether the capital expenditures flowing into AI infrastructure will actually generate returns proportional to their cost.
Broader market pressure
The damage wasn't confined to the Nasdaq. The S&P 500 declined about 2.6%, while the Dow Jones Industrial Average lost around 1.3% — a smaller decline, reflecting its lower exposure to growth-stock concentration. Bitcoin slid below $60,000 as the risk-off wave swept through every asset class that had been riding the same liquidity wave.
The trigger was straightforward. Stronger-than-expected employment data revived expectations of Federal Reserve rate hikes. For years, crypto and tech growth stocks have traded as risk-on twins. Both benefit from abundant capital and low borrowing costs. Both crater when those conditions reverse.
The rate-hike math
Higher interest rates hit AI infrastructure plays in a specific way. Raising the cost of capital for every company building out AI data centers makes the math of a $1 trillion capex cycle much harder to justify. Meanwhile, higher rates strengthen the dollar and raise the opportunity cost of holding non-yielding assets like Bitcoin, creating a double headwind for crypto.
The selloff underscores a simple truth: markets had priced in a soft landing and indefinite monetary accommodation. Jobs data that would once have been celebrated as a sign of economic strength now triggers fear of tightening. That fear hits hardest where valuations are most stretched — and AI stocks, like Bitcoin, have nowhere to hide.
