Nasdaq 100 plunges as Broadcom guidance hits AI rally
The Nasdaq 100 suffered its worst drop since April 2025, while the S&P 500 snapped a nine-week winning streak. Broadcom's unchanged AI guidance and a strong jobs report fueled a market-wide selloff and rate-hike fears. Bitcoin plunged 17%, and Ford fell 15% amid a major SUV recall.
*this image is generated using AI for illustrative purposes only.
Wall Street faced a volatile week as the Nasdaq 100 recorded its worst drop since April 2025's tariff shock, ending a nine-week winning streak for the S&P 500. The selloff was driven by disappointing guidance from Broadcom Inc. and hotter-than-expected jobs data, which reignited fears of a Federal Reserve rate hike. The risk sentiment shift also triggered a sharp decline in digital assets, with Bitcoin experiencing its worst weekly performance since the FTX collapse.
Broadcom guidance disappoints
Broadcom Inc. reported earnings that beat expectations, with next-quarter sales guided to $29.4 billion against a consensus of $28.6 billion. However, CEO Hock Tan kept the full-year AI semiconductor guidance unchanged at "in excess of $100 billion." This conservative outlook failed to meet sky-high investor expectations, leading to a 12.6% drop in the stock on Thursday and a further decline of over 7% on Friday. The semiconductor sector, tracked by the iShares Semiconductor ETF, tumbled more than 10% over the two days, marking its worst drop since April 2025.
Economic data fuels rate hike fears
The May jobs report showed payrolls rising by 172,000, significantly above the consensus of 85,000, while revisions for March and April added a combined 93,000 jobs. The unemployment rate held steady at 4.3%. Coupled with April CPI at 3.8% year-over-year—the highest since May 2023—the robust labor market data led money markets to almost fully price in a rate hike by the end of the year.
Crypto markets face bloodbath
The selloff extended to digital assets, with Bitcoin plunging below $60,000, marking a 17% weekly drop. This was the cryptocurrency's worst performance since November 2022, when the collapse of Sam Bankman-Fried's FTX roiled markets. Strategy Inc., the largest corporate holder of Bitcoin, dropped approximately 25% for the week. Chairman Michael Saylor disclosed the sale of 32 Bitcoin for $2.5 million between May 26 and 31, his first sale since December 2022.
Ford recalls SUVs amid market volatility
Ford Motor Co. shed 15% after a four-week winning streak, marking one of its worst weeks in years. The decline followed an announcement recalling nearly 420,000 Expedition and Lincoln Navigator SUVs from model years 2018 to 2022 due to a seat belt pretensioner defect. The defect can lock the belt during a crash, increasing the risk of injury. The recall includes approximately 14,000 vehicles in Canada.
| Metric | Value |
|---|---|
| Nasdaq 100 Performance | Worst drop since April 2025 |
| Broadcom Q2 Sales Guidance | $29.4 billion |
| Broadcom Full-Year AI Guidance | In excess of $100 billion |
| May Payrolls Increase | 172,000 |
| Unemployment Rate | 4.3% |
| Bitcoin Weekly Drop | 17% |
| Ford Weekly Decline | 15% |
| Ford Recall Volume | 420,000 units |
Will the Federal Reserve maintain a hawkish stance if inflation metrics remain elevated despite the cooling tech sector?
Can Broadcom meet its ambitious $100 billion AI guidance if investor sentiment continues to deteriorate?
Is the current crypto selloff a temporary correction or the start of a prolonged bear market similar to the post-FTX era?
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