Wall Street Slips as Tech Rally Runs Out of Steam and Bond Yields Surge

CNBC, the Wall Street Journal, NBC News, Reuters, Investor’s Business Daily, and Market Watch contributed to this report.

Stocks fell sharply Friday as investors dumped tech shares and Treasury yields climbed to levels that rattled markets already on edge after the Trump-Xi summit ended without any major breakthroughs.

The S&P 500 dropped 0.9%, while the Nasdaq slid 1.3%. The Dow Jones Industrial Average lost more than 400 points.

Tech stocks, which had powered the market higher for weeks on the AI frenzy, suddenly looked vulnerable. Intel tumbled 6%. AMD lost 3%, Micron fell 5%, and Nvidia dropped another 3%. Cerebras Systems, fresh off a massive debut rally Thursday, gave back 5%.

“The group has witnessed an extremely unsustainable move in recent weeks,” Vital Knowledge analyst Adam Crisafulli wrote, warning that the sector was ripe for profit-taking.

Microsoft managed to buck the trend after billionaire investor Bill Ackman revealed Pershing Square had built a position in the company. The stock rose 3%.

Bond markets added to the pressure. The yield on the 30-year Treasury climbed above 5.1%, its highest level since 2025, while the 10-year yield pushed toward 4.6%. Investors are increasingly worried inflation is heating up again as oil prices surge during the Iran conflict.

Higher yields tend to hit growth stocks hardest because they make future earnings less attractive. That became painfully clear Friday.

Oil kept climbing. US crude rose above $104 a barrel, and Brent crude topped $109 after Trump warned he was “not going to be much more patient” with Iran and said Tehran should “make a deal.”

Markets had also been hoping for something bigger out of the Beijing summit between Trump and Chinese President Xi Jinping. Instead, investors got vague statements, a loosely defined “board of trade” proposal and little clarity on tariffs, chip export controls or the future of the US-China trade truce.

Even the Boeing headline disappointed traders. Trump said China agreed to buy 200 Boeing jets, but investors quickly realized that was only modestly above earlier expectations and still lacked concrete details. Boeing shares fell another 2% after dropping nearly 5% the previous session.

Chip stocks had rallied earlier in the week when Nvidia CEO Jensen Huang unexpectedly joined Trump’s China trip, fueling speculation that US export restrictions might ease. Those hopes faded fast after US Trade Representative Jamieson Greer said chip controls were not seriously discussed during the meetings.

Underneath the market’s record highs, some investors are getting uneasy about how narrow the rally has become. A handful of giant tech companies continue carrying most of the gains while large parts of the broader market lag behind.

Argent Capital Management portfolio manager Jed Ellerbroek said that kind of setup leaves the market exposed if enthusiasm around AI starts to cool.

The selling spread beyond Wall Street. European markets also dropped sharply, while government bond yields surged across the UK, Japan and Germany as investors braced for higher inflation and slower economic growth tied to rising energy prices.