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U.S. equities tumbled Friday because of a violent sell-off for chip stocks. The tech-heavy Nasdaq Composite lost 4% for its biggest decline since the tariff turmoil of early 2025.

The catalyst for the chip turn this week was unclear. Some disappointment in Broadcom’s failure to raise its AI chip outlook Wednesday night caused the group to lose ground on Thursday. But Friday’s selling reached a new level of intensity. A spike in Treasury yields following a much stronger-than-expected jobs report for May didn’t help the case.

The Nasdaq lost 4.18% and closed at 25,709.43 for its biggest drop going back to April 2025. The S&P 500 dropped 2.64% and ended at 7,383.74, while the Dow Jones Industrial Average lost 695.15 points, or 1.35%, settling at 50,866.78. The blue-chip index closed at a record Thursday.

The S&P 500 lost more than 2% on the week for its first negative week in 10. The Nasdaq Composite tumbled 4.7% following Friday’s losses. The 30-stock Dow was modestly lower on the week.

The iShares Semiconductor ETF dropped 10% for its worst day since March 2020. Shares in Broadcom were nearly 8% lower after tumbling more than 12% on Thursday. Marvell Technology dropped more than 16% Friday. Intel and Advanced Micro Devices fell around 11%.

Micron Technology, the memory chipmaker that’s been the latest star of the bull market, was down 13% after dropping 8% on Thursday.

“Investors had been kind of hovering with their finger over this sell button,” said Mark Hackett, chief market strategist at Nationwide. “Not necessarily to get out. But if you’ve owned some of these semiconductor names through the last two months, you’re very out of whack with your long term positioning goal. You need to take profits at some point.”

In another sign of speculation coming out of the market, bitcoin tumbled below $60,000 for the first time since late 2024.

The iShares Semiconductor ETF is still up 79% on the year even after the recent declines. This rout comes as tech investors get ready for the largest IPO ever in SpaceX next week. Already set to go public at a valuation of $1.77 trillion, Elon Musk’s space and AI venture has boosted enthusiasm for the sector, while also stoking concern among some that its debut could mark some kind of top in what they think is an investing bubble. Others believe part of this chip and bitcoin decline is investors making room in their portfolio for the IPO.

“People looking to get into the SpaceX IPO next week, it’s unlikely they’re going to use Procter & Gamble funds to fund it,” said Nationwide’s Hackett. “It’s going to be some of these AI trades, the semis, the momentum names, or at least tech in general. … Once the boulder starts rolling down the hill, like we saw yesterday, you can see fairly disorderly sell-offs.”

Friday’s tech drop came after the Bureau of Labor Statistics reported that nonfarm payrolls increased by 172,000 in May, well above the 80,000 jobs that economists polled by Dow Jones had expected to be added. The 10-year yield jumped above 4.5%, while the 30-year yield advanced above 5%, key levels that revived concerns about a slowing economy and raising borrowing costs for companies helping to fuel the AI buildout.

Investors rotated into healthcare and staples stocks on Friday as they dumped tech shares. Colgate-Palmolive added 4%, and Coca-Cola was up more than 3%. Johnson & Johnson was up 2%.

— CNBC’s Jeff Cox and Garrett Downs contributed to this report.