Wall Street suffered its sharpest sell-off in months on Friday, with the tech-heavy Nasdaq plunging more than 4% in its biggest one-day drop since April 2025, as a surprisingly strong US jobs report reignited fears that interest rates will stay high.
The selling began after data showed the American economy added far more jobs than expected in April, a development that under normal circumstances would be welcomed. But against a backdrop of stubborn inflation, investors saw it as a sign that the Federal Reserve is unlikely to cut borrowing costs any time soon — and may even raise them again.
“Nasdaq sees biggest daily fall since April 2025 after strong US jobs data sparks rate hike fears.”
David Doyle, head of economics at Macquarie Group, described the figures as potentially “too good”, warning they raised the likelihood of a rate increase this year. That triggered a broad market rout: the S&P 500 closed 2.6% lower and the Dow Jones Industrial Average dropped 1.35%. Even Bitcoin tumbled as traders rushed to offload riskier assets.
The sell-off did not mark a global panic, but rather a violent rotation out of technology stocks. Major investment funds pulled money from AI and microchip companies, whose share prices had soared in recent years, and piled into traditionally safer sectors such as healthcare, utilities and consumer staples including Kraft Heinz and Keurig Dr Pepper.
President Donald Trump criticised the market’s negative reaction, arguing that “too much emphasis is placed on inflation”. “I hope the market starts to learn that when you have good numbers the market should go up not down,” he said.
Next week, tech and politics are set to collide. Trump has invited top AI executives to the White House to discuss a new proposal: the US government acquiring public stakes in their firms. The president claimed the move would allow everyday Americans to “benefit from the success of AI”.