Summary: Shares of NVIDIA dropped during morning trading, pressured by a surprisingly strong U.S. May nonfarm payrolls report that pushed rate expectations higher, lingering negative sentiment across the chip sector after Broadcom's guidance miss, and a routine ex-dividend effect. The moves hit the broader tech-heavy indices and left NVIDIA trading well below its 52-week peak despite healthy company fundamentals.
Shares of NVIDIA fell 3.7% in morning trading, with the stock quoted at $210.65 after opening near a session high of $214.87 and then extending losses. The principal catalyst was a far stronger-than-anticipated U.S. May nonfarm payrolls report: the economy added 172,000 jobs, more than double the consensus forecast of 85,000, while the unemployment rate slipped to 3.4%. The report largely extinguished lingering hopes for a near-term Federal Reserve rate cut and instead reignited expectations that rates could be raised.
Pressure on NVIDIA was amplified by ongoing weakness in the semiconductor sector. The industry had already been under strain after Broadcom issued an after-hours update on June 4 in which it guided Q3 AI chip revenue of $16 billion, below the $17.2 billion many had expected. That guidance shortfall prompted a widespread selloff in chip stocks in the prior session, and the negative tone carried into the current trading day, adding to the macro-driven selling.
There was also a technical, calendar-driven impact: NVIDIA's ex-dividend date occurred on June 4 for a $0.25 per share quarterly dividend, producing a modest, mechanical downward adjustment to the share price at the start of trading on the following day.
On the market-wide level, the stronger jobs report hit risk assets. The Nasdaq Composite was the hardest hit, falling 1.8%, while the S&P 500 declined 1.0% and the Dow Jones Industrial Average eased about 0.2%. Rate-sensitive sectors, notably technology and AI infrastructure, came under significant pressure as rising Treasury yields reduce the premium investors are typically willing to pay for high-multiple growth names. Given NVIDIA's elevated valuation and high beta, the company is especially exposed to this form of repricing.
Taken together, the wage of macro repricing from the jobs data, Broadcom's downbeat AI revenue outlook, and the ex-dividend effect combined to push NVIDIA meaningfully lower in the session. This occurred even as the company's recent operating metrics remain robust: NVIDIA reported 85% revenue growth in its most recent quarter and provided a forward-looking revenue outlook of $91 billion.
After the selloff, NVIDIA was trading roughly 11% below its 52-week high of $236.54. The episode highlights the tension between strong demand fundamentals for AI-related products and an evolving monetary policy backdrop that is increasingly a headwind for richly valued growth names.
Market snapshot (as reported):
- U.S. May nonfarm payrolls: +172,000 (consensus: 85,000)
- Unemployment rate: 3.4%
- NVIDIA morning decline: -3.7%; last quoted at $210.65
- Broadcom Q3 AI revenue guide: $16 billion (market expected $17.2 billion)
- Major indices: Nasdaq -1.8%, S&P 500 -1.0%, Dow -0.2%