The Dow Jones Industrial Average also slipped 515 points, or 1%, as investors turned cautious following the conclusion of the high-stakes summit between US President Donald Trump and Chinese President Xi Jinping without any major policy breakthrough.
The selloff came after Wall Street had opened sharply lower earlier in the day, with the Dow tumbling 436 points, the S&P 500 falling 1.13%, and the Nasdaq plunging 1.63% within minutes of the opening bell. Market watchers estimated that nearly $1 trillion was wiped out from US equities within the first five minutes of trading as inflation concerns and rising Treasury yields rattled investor sentiment.
The weakness was most visible in technology and semiconductor stocks, which had powered Wall Street’s recent AI-driven rally. Intel dropped 6%, while AMD and Micron Technology declined 3% and 5%, respectively. Nvidia lost 3%, extending pressure across chip counters, while the Philadelphia Semiconductor Index slid 4%.
Analysts said investors were booking profits in tech stocks after a prolonged rally. Adam Crisafulli of Vital Knowledge said the recent run-up in the sector had become “extremely unsustainable”, making the space vulnerable to profit-taking irrespective of headlines.
Broader market sentiment also weakened as Treasury yields surged to multi-month highs. The yield on the 30-year US Treasury bond crossed 5.1%, its highest level in nearly a year, after a string of inflation readings this week signalled persistent price pressures.
Concerns over inflation were amplified by rising crude oil prices amid escalating tensions in the Middle East. US West Texas Intermediate crude climbed 3% to about $104 per barrel, while Brent crude rose 3% to nearly $109 a barrel after Trump said he was “not going to be much more patient” with Iran and urged Tehran to strike a deal.
The spike in yields and oil prices raised fears that inflationary pressures could derail the AI-fuelled rally that recently pushed the S&P 500 above the 7,500 mark for the first time and helped the Dow reclaim the 50,000 level in the previous session.
Investors were also disappointed by the outcome of the Trump-Xi summit, which concluded without any significant trade or economic announcements. While both sides reportedly agreed on keeping the Strait of Hormuz open, markets viewed the lack of concrete breakthroughs as underwhelming.
Boeing shares fell another 2% after sliding nearly 5% in the previous session, as investors reacted negatively to Trump’s statement that China would buy 200 Boeing jets — only modestly higher than prior expectations.
Elsewhere, crypto-linked stocks also came under pressure amid the broader risk-off sentiment. Coinbase fell 8%, while Strategy declined 6%, as Bitcoin slipped below the $80,000 mark and headed for a weekly loss.
Despite the broader weakness, Microsoft emerged as a rare gainer, rising 3% after billionaire investor Bill Ackman revealed that Pershing Square had built a position in the company.
