Major tech stocks fell sharply Friday as concerns about the AI boom's durability combined with expectations of Federal Reserve rate hikes to trigger broad market losses.

The Nasdaq sank 4%, the S&P 500 lost 2.6%, and the Dow Jones Industrial Average fell 1.35%. Chipmakers Micron Technology, Intel, Cisco, and Nvidia led declines, while Meta, Amazon, and Microsoft suffered more modest losses.

The selloff was triggered by disappointing guidance from chip designer Broadcom late Wednesday, then amplified Friday when the Labor Department reported employers added a net 172,000 jobs last month—nearly double Wall Street forecasts. Prior months were also revised sharply higher.

With the labor market appearing more resilient than expected, investors increased their expectations that the Federal Reserve will prioritize fighting inflation (which has exceeded the central bank's 2% target for five years) over cutting rates, reducing expectations for additional rate cuts soon. The yield on the 10-year Treasury jumped 5.5 basis points to 4.532%.