Nasdaq Suffers Record Single-Day Point Drop
The Nasdaq stock index fell more than 1,121 points on Friday. This was the biggest one-day point drop ever recorded.
The index dropped 4% and lost nearly a month of gains. The broader S&P 500 index also fell sharply.
It lost $1.8 trillion in value on the same day. The selloff was triggered by a stronger-than-expected jobs report for May.
That report raised fears that the Federal Reserve would raise interest rates. Higher interest rate fears also pushed Treasury yields sharply up.
Chip makers were hit especially hard. The Philadelphia semiconductor index had its worst one-day drop since March 2020. Chip companies Marvell and Micron each fell roughly 13 to 16%.
Klear Note — Stock indexes measure how groups of companies are doing. When jobs reports show strong hiring, the Federal Reserve may raise interest rates to slow inflation. Higher rates make borrowing more expensive, which hurts company profits and stock prices.
Key Terms 5
- Nasdaq US stock market index focused on technology companies
- S&P 500 Index tracking 500 of the largest US companies
- Federal Reserve US central bank that sets interest rates
- Treasury yields Interest rates paid on US government borrowing
- Semiconductor Chips used to power computers and electronic devices