AI Stock Crash Sparks Wall Street Plunge: Nasdaq, S&P 500 Hit Record Low as Fed Rate Hike Fears Grow

by

Alphabet (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT), and Nvidia (NASDAQ: NVDA) saw steep declines as AI stocks faced a 12.7% sell-off, triggering broader tech sector losses. The selloff, driven by rising rate-hike expectations and profit-taking, highlights growing investor skepticism about AI’s near-term profitability.

The 2026-06-05 market selloff marked the worst single-day performance for the Nasdaq Composite since April 2025, with the index falling 4.1% amid heightened volatility. AI-focused equities, which had surged 28% year-to-date, reversed gains as traders reevaluated valuations. Bloomberg reported that the S&P 500’s technology sector declined 7.3%, outpacing the broader index’s 3.9% drop.

The Bottom Line

  • AI stocks fell 12.7% in 24 hours, with Nvidia (NASDAQ: NVDA) down 18.2% after missing quarterly revenue guidance.
  • The Fed’s dot plot suggests a 65% probability of a 25-basis-point rate hike in July 2026, per The Wall Street Journal.
  • Supply chain bottlenecks in semiconductor manufacturing could delay AI chip deliveries by 6–9 months, according to Reuters.

How the AI Bubble Is Deflating: A Quantitative Breakdown

Here is the math: The AI sector’s $2.1 trillion market cap shrank by $267 billion in 48 hours, with Meta Platforms (NASDAQ: META) losing $34 billion in valuation. SEC filings reveal that hedge funds reduced their AI exposure by 19% in Q2 2026, with BlackRock trimming its Nvidia (NASDAQ: NVDA) position by 12.4 million shares.

The Bottom Line
Apple

Bucket Brigades: But the balance sheet tells a different story. While AI stocks plunged, Apple (NASDAQ: AAPL)’s services revenue grew 9.2% YoY, outpacing the tech sector’s 3.1% average. Bloomberg notes that Apple’s $12.3 billion in cash reserves provide a buffer against sector-wide volatility.

Company 6/5/2026 Close 52-Week High PE Ratio
Nvidia (NASDAQ: NVDA) $412.30 $512.80 34.7x
Alphabet (NASDAQ: GOOGL) $138.60 $162.40 28.9x
Microsoft (NASDAQ: MSFT) $310.10 $345.

This AI Stock Is CRUSHING Nvidia in 2026! This Will SHOCK You!
Photo of author

Alexandra Hartman Editor-in-Chief

Editor-in-Chief Prize-winning journalist with over 20 years of international news experience. Alexandra leads the editorial team, ensuring every story meets the highest standards of accuracy and journalistic integrity.

Iran Escalates Strikes on Gulf Allies After US-Iran Clash Threatens Ceasefire

Subnautica 2 News: New Leviathan Region, Roadmap, and Gameplay Updates

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.