Semiconductors and Nasdaq 100 Plunge 10% as Inflation Fears Resurface

Amid escalating concerns over higher-for-longer interest rates, the technology sector experienced a violent sell-off that sent the Philly Semiconductor Index down 10% in a single day. According to reports, the Nasdaq 100 index fell nearly 5% as selling pressure intensified across growth stocks. This slump coincided with 10-year Treasury yields climbing to 4.53% following robust employment data that bolstered expectations for a restrictive monetary policy stance.

This collapse comes as chipmakers face dual pressure from high borrowing costs and stretched valuations, with industry leaders like Nvidia and AMD dropping over 7% during the session per market data. Compared to the previous quarter, the tech sector's sensitivity to inflation data has spiked, especially as the US ISM Manufacturing PMI hit 54 (close June 1, 2026), exceeding forecasts and signaling persistent economic strength that could fuel inflationary pressures.

Investors are now monitoring key technical support levels for the Nasdaq 100 following this sharp decline, with Treasury yields holding at elevated levels (close June 7, 2026). Looking ahead, the market awaits Fed Kashkari's speech on June 2, 2026, for clues on the future rate path, alongside inflation data from South Korea and the Netherlands which may provide further insight into global pricing trends.