Wall Street saw a sharp selloff Friday, with the tech-heavy Nasdaq plummeting 4%-its worst drop since April 2025. The S&P 500 closed 2.6% lower, and the Dow fell 1.35%.
The trigger: a surprisingly strong April jobs report that stoked fears the Federal Reserve will keep interest rates higher for longer amid stubborn inflation.
"It was potentially too good," said David Doyle, head of economics at Macquarie Group, warning the data raised the likelihood of a rate hike this year.
Investors rushed to offload riskier assets, including cryptocurrencies: Bitcoin dropped sharply. Major funds pulled money from AI and microchip companies, which critics have warned are overvalued-echoing the dotcom bubble of the early 2000s.
Instead, capital flowed into traditionally safe sectors: healthcare, utilities, and consumer staples like Kraft Heinz and Keurig Dr Pepper.
President Donald Trump criticized the market reaction, saying, "Too much emphasis is placed on inflation," and adding, "I hope the market starts to learn that when you have good numbers the market should go up not down."
Looking ahead, tech and politics converge next week: Trump has invited top AI executives to the White House to discuss a proposal for the U.S. government acquiring public stakes in their firms, claiming it would let everyday Americans "benefit from the success of AI."