Gotrade News - AI stocks crashed after a hotter-than-expected US jobs report triggered a broad market selloff. The S&P 500 fell 2.6%, the NASDAQ dropped 4.2%, and the Dow Jones slipped 1.3% in the session.
The drop reignited fears of a valuation bubble across an AI sector that has run hot for months. Investors began questioning whether mega-cap tech prices still made sense amid rising rate worries.
Key Takeaways
Broadcom (AVGO) sank 7.49% and Nvidia (NVDA) fell 5.93% in the AI stock rout.
A hot US jobs report fueled fears the Fed could raise interest rates.
The selloff spread to Asia, with South Korea's Kospi crashing 9%.
According to The Motley Fool, Broadcom (AVGO) closed at $387.52, down $31.39 or 7.49% in the June 5, 2026 session. The selloff put profit margins in focus even as the company's revenue keeps booming.
Shares of Nvidia (NVDA) were also hit hard, sliding 5.93% to $205.70 in the same session. Nvidia now sits near a valuation of roughly $5 trillion, a level making many investors nervous.
Per The Motley Fool, the immediate trigger was a US employment report that came in far stronger than expected. Data this strong raises the odds the Fed keeps rates higher for longer.
Pressure Spreads to Asia
As reported by Investing.com, the selling wave also slammed Asian markets as the AI trade unwound. South Korea's Kospi index crashed 9% in a brutal session for technology stocks.
SK Hynix shares fell 4.1% while Samsung Electronics dropped 7.8%, according to Investing.com data. Negative sentiment worsened as strong US jobs data stoked fears of global rate hikes.
The Kospi's 9% drop reflected South Korea's heavy reliance on chip and technology exports. When AI demand gets questioned, memory chipmakers tend to be the most exposed to sharp corrections.
Tech giants like Amazon, Alphabet, and Microsoft are now building their own proprietary AI chips. That shift adds competitive pressure on established chip suppliers amid already-stretched valuations.
The selloff underscored how tightly global markets are wired to a single AI trade theme. Once Wall Street sentiment flipped, Asian markets were dragged along within just a few hours.
Broader sector exposure showed up in the VanEck Semiconductor ETF (SMH), a flagship basket of chip stocks. The fund slid too as nearly every major chip name weakened in unison during the session.
Broadcom's spotlight now falls on profit margins even as the company's revenue keeps booming. Investors worry that rising costs could erode profitability as competition in custom chips intensifies.
Added pressure came from Nvidia's valuation, which neared $5 trillion just before this sharp correction. A number that large leaves little room for error when market sentiment turns quickly.
Some analysts instead view the sharp pullback as a generational buying opportunity if fundamentals hold. Yet the risk stays real until the Fed's interest-rate path becomes clearer.
Gotrade is the trading name of Gotrade Securities Inc., which is registered with and supervised by the Labuan Financial Services Authority (LFSA). This content is for educational purposes only and does not constitute financial advice. Always do your own research (DYOR) before investing.
