The broader market weakened throughout the session, with the S&P 500 sliding 1%, while the tech-heavy Nasdaq Composite dropped 1.3%. The Dow Jones Industrial Average also suffered heavy losses, falling more than 500 points, or roughly 1%.
Technology companies, which have powered Wall Street’s record-setting rally in recent months, led the downturn as investors rushed to lock in profits after weeks of aggressive gains. Chipmakers were among the hardest hit. Intel tumbled 6%, while Advanced Micro Devices and Micron Technology lost 3% and 5%, respectively. Nvidia also declined by 3%, extending pressure across the semiconductor sector.
Cerebras Systems, which had surged an astonishing 68% during its Nasdaq debut on Thursday, reversed course and slipped 4% as enthusiasm cooled.
Market analysts suggested the retreat was driven less by panic and more by investors reassessing valuations after the sector’s rapid ascent.
“The group has witnessed an extremely unsustainable move in recent weeks and remains vulnerable to profit taking regardless of the headlines,” wrote Adam Crisafulli of Vital Knowledge.
Despite the broader tech weakness, Microsoft stood out as one of the few major gainers. Its shares climbed 3% after billionaire investor Bill Ackman revealed that Pershing Square had established a position in the company, boosting confidence among investors.
Meanwhile, rising Treasury yields added another layer of pressure on equities. The yield on the 30-year U.S. Treasury bond climbed above 5.1%, reaching its highest level since 2025. Investors reacted to a series of economic reports suggesting inflation may be accelerating again, fueled in part by elevated oil prices tied to ongoing tensions in the Middle East.
Higher bond yields tend to weigh heavily on growth-oriented technology stocks because they reduce the attractiveness of future earnings.
Oil prices also surged on Friday. U.S. West Texas Intermediate crude rose 3% to $104 per barrel, while Brent crude climbed to $109. The gains followed fresh comments from President Trump regarding Iran.
“I’m not going to be much more patient,” Trump said in an interview with Fox News, adding that “they should make a deal.”
Markets were equally disappointed by the outcome of the Trump-Xi summit. While both leaders reportedly agreed that the Strait of Hormuz must remain open — a critical issue for global energy markets — investors had anticipated stronger announcements on trade and economic cooperation.
According to Crisafulli, the limited outcomes failed to impress traders.
“The few headlines that did come out of the summit (like the Boeing orders) were underwhelming,” he noted.
Boeing shares continued to slide, dropping another 2% after nearly a 5% decline in the previous trading session. Investors reacted negatively after Trump announced that China would purchase 200 Boeing aircraft — only modestly above prior expectations of 150 jets.
The market pullback came just one day after Wall Street celebrated another milestone session. On Thursday, the Dow Jones Industrial Average reclaimed the 50,000 mark, while the S&P 500 closed above 7,500 for the first time in history.
Much of the market’s strength this year has been fueled by investor excitement surrounding artificial intelligence and the massive gains recorded by major tech firms. However, some portfolio managers are beginning to question the sustainability of the rally, warning that market leadership has become too concentrated.
Argent Capital Management portfolio manager Jed Ellerbroek said investor sentiment remains broadly optimistic, but cracks are beginning to emerge beneath the surface.
“It doesn’t feel right to say that tech is just going to lead forever,” Ellerbroek said.
He pointed out that earlier this year, investors briefly rotated away from technology stocks into more defensive sectors such as consumer staples and materials, a trend often referred to as the “HALO” trade.
“One thing kind of popping up and driving the market is inherently more risky than if there were several things,” he added.
The latest market retreat may now test whether Wall Street’s AI-driven rally still has enough momentum to withstand mounting economic pressures, rising borrowing costs, and geopolitical uncertainty.