Stock Market This Week (June 1–5, 2026): Chip Rout Sinks Nasdaq as Rotation Roars

The trading week of June 1–5, 2026 split the market in two. Mega-cap semiconductors collapsed after AVGO Broadcom delivered a soft AI-chip outlook, and a far hotter-than-expected May jobs report on Friday revived rate-hike bets — yet underneath the index-level damage, money rotated aggressively into healthcare, financials, and defensives, pushing the Dow to a record midweek. The dominant theme: the most violent growth-to-value rotation of 2026, as the AI trade cracked and the bond market repriced the Fed path higher.

The Week at a Glance

The headline indexes diverged sharply, a tell-tale sign of rotation rather than a broad risk-off event.

• S&P 500 (SPX): fell about 158 points, or 2.1%, to close at 7,383.74. The index hit a record above 7,600 on Tuesday before the chip rout erased the gains. YTD: +9.0%.
• Nasdaq Composite: shed roughly 1,268 points, or 4.7%, to 25,709.43 — its worst week since April 2025, with Friday's 4.18% plunge the single biggest down day of the stretch. YTD: +11.0%.
• Dow Jones Industrial Average (DIA): bucked the trend, adding about 250 points (0.5%) to 50,866.78. With its light tech weighting, the Dow set a record close of 51,561.93 Thursday before Friday's 695-point (1.35%) drop. YTD: +7.0%.
• Russell 2000 (IWM): small caps proved relatively resilient, rising 0.4% on the week to roughly 2,896. YTD: +4.6%.

Volatility, Yields, and Commodities

The VIX opened the week near 16.05 and, despite Friday's stampede out of chips, the volatility spike stayed contained — the gauge popped toward the low 20s intraday before settling back near 16 by the close, a sign the selling was concentrated rather than systemic.

Rates did the heavy lifting. The 10-year Treasury yield drifted to about 4.46% midweek on falling oil before Friday's payrolls report sent it sharply higher, ending near 4.55%, up roughly 9 basis points on the week. The rate-sensitive 2-year climbed to about 4.08% as traders priced out any 2026 rate cut. The U.S. Dollar Index firmed about 0.6% to 100.0.

Commodities split: WTI crude (CL=F) jumped roughly 6% to near $93 on Israel-Lebanon ceasefire uncertainty and stop-start U.S.–Iran talks, while gold (GC=F) fell about 4% to near $4,365, a 2026 low, as the strong jobs print and rising yields hammered the metal.

Weekly Sector Performance

Eleven GICS sectors, ranked by weekly return — the rotation is unmistakable, with every defensive and value group green and tech alone accounting for the index-level loss.

Biggest Stock Movers This Week

Broadcom (AVGO) was the epicenter. Fiscal Q2 revenue hit $22.19 billion, up 48% year over year, with AI chip sales of $10.8 billion (+143%) and EPS of $2.44 beating the $2.39 estimate. But guidance disappointed: the company pegged next-quarter AI semiconductor revenue at $16 billion versus the $17.2 billion Street consensus and declined to raise its full-year AI target. The stock, up 88% over the prior year, fell about 14% in a textbook sell-the-news reaction.

Marvell (MRVL) dropped 10.3% as the Broadcom miss cast doubt on the broader custom-silicon and AI-accelerator demand story.

Micron (MU) sank about 11.5% on read-through fears for high-bandwidth memory tied to AI buildouts.

Intel (INTC) and AMD (AMD) each shed roughly 11%, dragging the Philadelphia Semiconductor Index down 10.3% Friday — its largest single-day drop since March 2020 — as chipmakers collectively lost about $1.3 trillion in market value.

Nvidia (NVDA) was the largest single contributor to that wipeout by dollar value, falling with the group despite no company-specific news, underscoring how concentrated the AI trade has become.

UnitedHealth (UNH) led the other side of the rotation, jumping 5.4% after Bank of America upgraded the stock to Buy from Neutral, lifted its target to $450 from $420 on improving medical-cost trends, and the company raised its quarterly dividend. The move dragged managed-care peers higher.

Eli Lilly (LLY) rounded out the healthcare leadership, climbing alongside UNH as investors parked capital in large-cap defensives with earnings visibility.

Macro & Policy: Jobs, the Fed, and Yields

The week's defining data point landed Friday. May nonfarm payrolls rose 172,000, more than double the 85,000 consensus, with April revised up to +179,000. The unemployment rate held at 4.3%, and average hourly earnings rose 0.3% month over month (+3.4% year over year). Job gains were led by leisure and hospitality (+70K), local government (+55K), health care (+35K), and manufacturing (+7K).

The print torched what little remained of rate-cut hopes. With April CPI already running at 3.8% year over year — the hottest since May 2023 — markets now lean toward the Fed holding at the June 16–17 FOMC meeting (the first under new Chair Kevin Warsh) and even price a small probability of a quarter-point hike before year-end. Treasury yields jumped across the curve, and the dollar firmed.

Geopolitics stayed in the mix: hopes for an Israel-Lebanon ceasefire and progress in U.S.–Iran negotiations swung oil sharply, keeping energy bid even as crude finished well off its midweek highs.

Earnings Season Snapshot

With roughly 97% of S&P 500 companies having reported Q1 2026 results, the scorecard is among the strongest in years: 85% beat EPS estimates — the highest share since Q2 2021 and well above the 76% 10-year average — and 81% topped revenue forecasts. The blended earnings growth rate sits at its best level since Q4 2021. The Q1 cycle is now essentially complete; June is a reporting lull before Q2 season ramps in mid-July.

What to Watch Next Week

• May CPI — Wednesday, June 10 (8:30 a.m. ET): the single most important release on the calendar after April's 3.8% reading; a hot print would cement the no-cut narrative.
• May PPI — Thursday, June 11: wholesale inflation read ahead of the FOMC.
• Fed blackout: no Fed speakers, with policymakers quiet ahead of the June 16–17 meeting.
• Earnings: Oracle (ORCL) and Adobe (ADBE) headline a thin mid-June slate; both are key AI-demand tells after the Broadcom scare.
• Treasury supply: 3-, 10-, and 30-year auctions mid-week will test appetite for duration at higher yields.
• Sentiment: preliminary June University of Michigan consumer sentiment lands Friday, June 12.