The tech-heavy Nasdaq composite endured its worst week in over a year, plunging 4.2% as chip stocks led the downward spiral. Semiconductor companies bore the brunt of the selling, with the sector dropping 6.2% amid widespread profit-taking. The steep decline exposed vulnerabilities in this year's tech rally, catching investors off guard as the market faces renewed uncertainty.

A better-than-expected jobs report triggered the selloff by raising concerns about higher interest rates. NVIDIA fell sharply after reporting weak guidance that sparked fears AI demand may not accelerate as quickly as anticipated. The chip giant's 7.9% drop reflected growing skepticism about the sustainability of AI-driven growth in a rising rate environment.

The market's reaction underscores how sensitive tech stocks remain to interest rate expectations. With the Federal Reserve potentially adjusting policy sooner than expected, investors reassessing valuations across the tech sector. This week's carnage suggests the AI-fueled rally may face headwinds as macroeconomic factors reassert influence on stock prices.