Chip Stocks Lose $1.3 Trillion in Two Days as Broadcom Disappoints, Jobs Data Fuels Rate-Hike Bets

The Philadelphia Semiconductor Index crashed 10.26% on Friday, June 5, 2026, its steepest drop since March 2020, erasing about $1.3 trillion in market value over two days. Broadcom’s AI revenue forecast of $16 billion for the fiscal third quarter missed the $17.2 billion consensus, and the full-year outlook of $56 billion also fell short. CEO Hock Tan’s disclosure that Google parent Alphabet plans to diversify its chip supply rattled investors. Nvidia fell 6%, losing over $300 billion in market cap; AMD, Intel, and Micron tumbled 11% or more. The rout deepened after the Labor Department reported 172,000 new jobs in May, more than double the 85,000 forecast, pushing the 10-year Treasury yield to 4.54% and rate-hike odds for end-2026 to 67.7%. The SOX, which had surged 75% year-to-date and hit a record on June 3, was hit by crowded positioning, analysts said. The sell-off is viewed as a valuation re-rating rather than a fundamental breakdown, with the Fed’s June 17-18 meeting and upcoming chip earnings as next catalysts.