Stock Market Plummets Amid Strong Jobs Report and AI Fears

The stock market experienced a sharp decline on Friday, with all major indices showing significant losses. The Nasdaq index dropped 4.18%, its worst day since the tariff shock of early 2025, while the Dow fell 695 points and the S&P 500 dropped 2.64%.

The collapse was largely attributed to a strong jobs report, which indicated that US employers added 172,000 jobs in May, exceeding expectations. This development sparked fears that the Federal Reserve may raise interest rates instead of cutting them, leading to higher borrowing costs and a decline in risky assets such as tech stocks and cryptocurrencies.

The AI bubble fear also contributed to the market downturn, with chip stocks leading the crash. Broadcom's disappointing earnings report and Nvidia's 6% fall were among the key factors that triggered investor panic. The rising bond yields, which jumped above 5%, further exacerbated the situation by making safe bonds more attractive than stocks and cryptocurrencies.

The cryptocurrency market was severely impacted, with Bitcoin plummeting to a 2026 low near $59,100, down almost 20% in just seven days. Over $1.75 billion was liquidated in 24 hours, affecting over 350,000 traders. The Fear & Greed Index dropped to 12, indicating extreme fear among investors.

Market analysts are warning of a 'risk-off' mood, with investors turning to cash and gold as a safe-haven asset. Bitcoin's performance is being closely watched, with the $59K to $60K zone seen as a crucial support level that could spark a rebound or further declines.