Nasdaq falls sharply as chip stocks decline, dragging Dow and crypto markets lower

The Nasdaq Composite fell 4.18% on June 5, its worst single-day drop since April 2025, as a trillion-dollar selloff in semiconductor stocks dragged the Dow and S&P 500 lower and spilled into crypto markets, with Bitcoin dropping to $62,546 and Ether losing 7.2% for the week.

Nasdaq falls sharply as chip stocks decline, dragging Dow and crypto markets lower A trillion-dollar semiconductor selloff is rippling through every corner of risk markets, including Bitcoin and Ether. The Nasdaq Composite dropped 4.18% on June 5, closing at 25,709.43 in what became the index’s worst single-day performance since April 2025. The damage was concentrated in the final trading hour, when a wave of selling in semiconductor stocks turned an ugly day into a genuinely painful one. The Dow Jones Industrial Average shed 695.15 points, or 1.35%, finishing at 50,866.78. The S&P 500 wasn’t spared either, declining 2.64%. But the real carnage happened in chipmakers, where the Philadelphia SE Semiconductor Index lost more than $1 trillion in market value in a single session. The AI trade hits a wall Major chip names like Micron, Nvidia, and AMD saw intraday declines of 10-13% during late June trading sessions. The Philadelphia Semiconductor Index registered a 7.9% drop on one occasion, signaling this wasn’t a one-day hiccup but a sustained reassessment of whether valuations had gotten ahead of themselves. The damage wasn’t contained to US markets either. South Korea’s Kospi index fell as much as 10% in late June, dragged down by the country’s massive semiconductor sector. Crypto catches the same cold Bitcoin dropped to around $62,546 by June 24, marking a 5% decline for the week. Ether fared worse, posting a 7.2% weekly loss during the same stretch. US spot Bitcoin ETFs saw outflows exceeding $6 billion over a 30-day period. These are institutional allocators making deliberate decisions to reduce exposure. What this means for investors Semiconductor valuations had stretched to levels that assumed near-perfect execution on AI monetization timelines. A $1 trillion single-session loss in chip stocks, however, isn’t exactly a gentle tap on the brakes. For crypto-native investors, the $6 billion in Bitcoin ETF outflows over 30 days represents something worth watching closely. These aren’t retail traders panic-selling on Coinbase. These are institutional allocators making deliberate decisions to reduce exposure. Traders should be watching the Philadelphia Semiconductor Index as a leading indicator for crypto sentiment in the near term. If chip stocks stabilize and find a floor, that could signal a broader appetite for risk assets returning. If the selling continues, expect Bitcoin and Ether to remain under pressure, with altcoins facing even steeper declines. Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy https://cryptobriefing.com/editorial-policy/ .