Wall Street ended a volatile session in the red Friday, with major indices pulling back from recent highs after the May jobs report came in much hotter than expected, sending bond yields sharply higher and triggering a broad selloff in semiconductor stocks. The S&P 500 dropped 1.2% to trade near 7,480, the Nasdaq Composite tumbled 2.2%, and the Dow Jones Industrial Average slipped 0.3%.

Among Elliott Wave analysts and technical traders on X, the conversation is focused on one question: is this a healthy pullback within a larger bullish impulse, or the start of a deeper corrective move?

The Technical Move: From Peak to Correction

Monday's all-time high at 7,620.90 — set on June 2 — was a significant technical milestone that many wave analysts had been targeting. According to Elliott Wave counts circulating on X throughout the week, that high completed sub-wave (i) within wave 3 of the rally that began from the March 30 low.

From that March trough, the S&P 500 traced a clean impulsive structure: wave 1 finished at 7,147.78, wave 2 corrected to 7,046.55, and wave 3 then unfolded with nested sub-waves that peaked at 7,620. Now, with Friday's sharp drop toward 7,480–7,500, the market is executing a corrective move that analysts expect to find initial support in the 7,450–7,490 zone, followed by the critical 7,336 level — the sub-wave ((ii)) low that serves as the bull case's make-or-break pivot.

"As long as 7,336 holds, the impulsive advance is intact. A correction to 7,450 is healthy, not a reason to panic," one popular technical account posted.

What Triggered the Selloff

The catalyst was the May jobs report, which showed 172,000 new nonfarm payrolls — more than double the 80,000 economists expected. A strong labor market revived rate-hike speculation: the 10-year Treasury yield jumped above 4.5% and the 30-year yield crossed 5%. Growth stocks, particularly semiconductors, bore the brunt.

Broadcom (AVGO) led the losers with a 5% drop Friday on top of Thursday's 12% plunge after AI chip guidance failed to meet the market's most bullish expectations — even though the headline numbers were strong. Marvell Technology (MRVL) fell 8%, Micron (MU) lost more than 7%. Nvidia (NVDA) held up relatively better, supported by a Bank of America buy rating and a $350 price target.

"Earnings expectations got so elevated that even good news ends up disappointing," said Anshul Sharma, chief investment officer at Savvy Wealth. "The AI narrative is intact — but expectations need to reset."

What Traders Are Watching

Technical chatter on X frames this as the "first real test" of the rally that began in March. After nine consecutive up weeks, this week's decline marks the first weekly loss in ten. The question is depth.

"After 9 straight green weeks, a 2-4% pullback from 7,620 is completely normal. But if we break 7,340 — plan for a deeper correction," one trader wrote.

On the bullish side, voices note that even strong impulsive waves contain 3-5% corrections. The current impulse could still target 7,700–7,800 after a shallow wave (ii) or wave 4 completes, before the larger correction expected later in 2026.

Rotation into Defensives

Another technical signal drawing attention: sector rotation from tech into consumer staples. Colgate-Palmolive (CL) and Coca-Cola (KO) both rose more than 3% — textbook relative strength for a risk-off Friday.

"The rotation into defensives doesn't mean the market is collapsing, but it tells you traders are de-risking into the weekend," one analyst noted.

The Bottom Line

The S&P 500 is testing a critical inflection zone. The rejection at 7,620 in response to hot macro data and a chip selloff is technically significant, but wave analysts on X see 7,450–7,490 as the first line of defense and 7,336 as the major bull/bear line. If those levels hold, this correction reinforces the broader uptrend. If they break, the conversation shifts to a deeper ABC correction.

The coming week will decide direction: a quick recovery above 7,550–7,600 reasserts the bullish path. A deeper break opens the door to more aggressive selling toward the 7,100–7,200 zone.