Wall Street had a rough day on June 5, and “rough” might be underselling it. The Nasdaq Composite dropped approximately 4%, its steepest single-session fall since April 2025, as a broad sell-off tore through the technology sector and sent shockwaves into crypto markets.

The S&P 500 fell roughly 2.6%, snapping a nine-week winning streak. The Dow Jones Industrial Average shed about 1.35%. And Bitcoin, never one to miss a party or a panic, slipped below $60K for the first time since October 2024.

Semiconductors bore the brunt

The epicenter of the damage was semiconductors. The PHLX Semiconductor Index, better known as the SOX, cratered as much as 10% during the session. Nvidia and Broadcom, two of the biggest beneficiaries of the AI spending boom, found themselves under heavy selling pressure.

The catalyst was a surprisingly strong May jobs report. In normal times, a healthy labor market would be welcome news. But in the current environment, where investors are laser-focused on the Federal Reserve’s next move, strong employment data translates to one thing: interest rates might stay elevated, or even climb higher.

Higher rates make future earnings less valuable in present-day terms. And when you’re talking about AI stocks trading at nosebleed valuations based on projections years into the future, that math gets painful fast.

The VIX index, Wall Street’s so-called “fear gauge,” ticked higher as the sell-off intensified.

Crypto caught in the crossfire

Bitcoin’s drop below $60K marked a meaningful technical breach. The last time it traded at those levels was October 2024, and the move lower caught many traders off guard after months of relative stability in the mid-to-high five figures.

Crypto-linked equities fared even worse. Coinbase and Marathon Digital saw their shares tumble between 6.5% and 11%, amplifying losses beyond what Bitcoin itself experienced.

A rotation, not necessarily a collapse

Major tech firms have committed staggering sums to AI infrastructure. The spending has been justified by the promise of transformative revenue growth. But investors are increasingly asking a simple question: when does the payoff actually arrive? And what happens if interest rates make the wait more expensive?

For crypto investors, the implications are nuanced. On one hand, a sustained decline in tech stocks could continue to weigh on digital assets, particularly Bitcoin and the large-cap altcoins that institutional investors tend to group with growth equities in their portfolio models.

Crypto traders should be watching Treasury yields closely. The $60K level for Bitcoin now becomes a critical line in the sand. A clean bounce above it would suggest the sell-off was a one-day flush. A failure to reclaim it could open the door to a retest of lower support levels that haven’t been relevant since mid-2024.

One data point worth monitoring: the degree to which crypto-linked equities diverge from or converge with Bitcoin’s price action in the coming sessions. If Coinbase and Marathon Digital stabilize before Bitcoin does, it could signal that equity investors view the sell-off as overdone.