**NEW YORK —** Major technology companies faced a sharp sell-off Friday amid rising global economic uncertainty, with chipmakers leading declines as investors reacted to stronger-than-expected U.S. jobs data and concerns over the pace of artificial intelligence investment returns.
The Nasdaq Composite Index dropped about 4.2 percent, its worst daily performance in more than a year, while the S&P 500 and Dow Jones Industrial Average also closed lower. Shares of Nvidia fell 6.2 percent, Broadcom dropped 7.9 percent and Micron Technology slid 13.3 percent, according to market data.
The sell-off extended to European and Asian markets, with chip-related stocks under particular pressure. The pan-European Stoxx 600 technology index fell 2.8 percent, market reports said.
A robust May U.S. jobs report, which showed stronger hiring than anticipated, raised expectations that the Federal Reserve could maintain higher interest rates for longer. This weighed on growth-sensitive technology stocks that had driven much of the market's gains earlier in the year.
Broadcom's recent earnings and guidance also contributed to the pullback. Despite solid results, investors appeared disappointed by aspects of the outlook, prompting selling in semiconductor names, analysts and reports indicated.
The declines came after technology shares had powered the market to record highs, fueled by enthusiasm around artificial intelligence. Some investors rotated toward more defensive sectors amid the uncertainty.
"Details remain unclear" on the full extent of any shift in investor sentiment, but the moves reflected caution over elevated valuations in the sector and the broader macroeconomic backdrop, according to market participants.
The sell-off erased more than $1 trillion in market value from semiconductor stocks at one point, according to some estimates. Global factors, including geopolitical developments, added to the sense of uncertainty, though specific links to the equity moves were not detailed in immediate reports.
Technology companies have been at the center of market performance in recent years, with heavy investments in AI infrastructure. However, questions about the timing and scale of returns on those expenditures have surfaced periodically.
As of Friday's close, major indexes remained positive for the year overall, though the technology-heavy Nasdaq had given back some recent gains. Trading volumes were elevated during the session.
Analysts at firms including Goldman Sachs and others have noted the fragility of the recent rally in AI-related stocks.
In after-hours and subsequent trading, some stocks saw partial recovery, but the broader market mood remained tentative heading into the new week.
The latest developments follow a period of strong performance for Big Tech firms, with companies like Nvidia and Broadcom reporting significant revenue growth tied to data center and AI demand in prior quarters.
Market participants will watch upcoming economic data and corporate earnings for further signals on the health of the technology sector and the global economy. Details on specific policy responses or corporate strategies in response to the sell-off were not immediately available.
