Shares of technology companies slid as traders dumped high-flyers in the sector in anticipation of rising interest rates.
Employers added 172,000 workers in May, far ahead of economists' expectations.
The PHLX SOX Semiconductor index fell by more than 10% on Friday, its biggest rout since the depths of the 2020 pandemic. Still, the SOX remains up by 79% for the year.
There's still a good chance that the chip selloff is a pause rather than an irrevocable halt in the AI stock frenzy, said Lorenzo Di Mattia, manager of hedge fund Sibilla Global Fund.
After a string of "beat and raises" for major chip makers, many of whom cited artificial-intelligence demand, Broadcom recently left its revenue projection for the year unchanged, a conservative estimate given aggressive chip investment plans at Alphabet, one of its major partners. The guidance has broken the ebullient mood surrounding companies making the hardware for a massive wave of data-center development.
