S&P 500 sheds $1.8T as Nasdaq records its biggest single-day point drop ever

Wall Street just had one of those days where everything that could go wrong did. The S&P 500 shed roughly $1.8 trillion in market value on Friday, dropping 2.64% to close at 7,383.74. The Nasdaq Composite had it even worse, plunging 1,121.53 points, or 4.18%, to finish at 25,709.43, marking the largest single-day point decline in its history.

The catalyst? A jobs report so strong it spooked everyone. The Bureau of Labor Statistics released May employment data that blew past expectations, sending Treasury yields higher and effectively killing hopes that the Federal Reserve might cut rates anytime soon.

Good news is bad news, and bad news is everywhere

This is the classic “good news is bad news” dynamic that has haunted markets for years now. Robust hiring numbers mean the Fed has less incentive to ease monetary policy. Higher-for-longer interest rates make borrowing more expensive, compress valuations on growth stocks, and generally make investors reconsider whether they want to be holding risk assets at all.

The session snapped the S&P 500’s nine-week winning streak. Technology, AI, and semiconductor stocks bore the brunt of the damage, as these sectors are most sensitive to interest rate expectations because their valuations are built on future earnings projections.

Crypto caught in the crossfire

Bitcoin slipped below $60,000 on Friday, a level it hadn’t breached since October 2024. The damage extended well beyond Bitcoin itself. MicroStrategy, Coinbase, and Robinhood all posted losses ranging from 6.5% to 11%.

The correlation between equities and digital assets during Friday’s selloff illustrates something that has become increasingly difficult to deny. Crypto trades like a risk asset. When Treasury yields spike and rate-cut expectations evaporate, Bitcoin doesn’t act like digital gold. It acts like a high-beta tech stock.

What this means for investors

The trigger wasn’t a geopolitical crisis or a corporate scandal. It was a strong jobs report. That means the underlying issue, persistent economic strength keeping the Fed on the sidelines, isn’t going away with a single data point.

The cross-market contagion on display Friday should also serve as a reminder that portfolio diversification between equities and crypto offers less protection than many investors assume. When the macro environment shifts, correlations tend to spike.

Traders should be watching Treasury yields closely in the coming sessions. If the 10-year yield continues to climb on the back of strong economic data, the pressure on both equities and crypto is likely to persist.

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