U.S. stock markets experienced their worst single-day decline of the year on Friday, with the S&P 500 falling more than 2.6 percent and the Nasdaq tumbling 4 percent as investors reacted to stronger-than-expected employment data that raised expectations for Federal Reserve interest rate hikes.

The technology-heavy Nasdaq bore the brunt of the selloff, driven primarily by steep declines in semiconductor and memory chip companies. The chip sector rout wiped out approximately $1.3 trillion in stock market value, according to market data.

The market decline followed the release of robust U.S. jobs data that exceeded economist expectations, prompting investors to increase bets on potential Federal Reserve rate increases. Bond markets reflected this shift as traders adjusted their expectations for monetary policy in the coming months.

The S&P 500's decline ended a nine-week winning streak, marking a significant reversal from the market's recent rally. Gold prices also fell sharply, nearly erasing year-to-date gains as the stronger dollar and rising rate expectations weighed on the precious metal.

The selloff presents an early test for newly appointed Federal Reserve leadership, as policymakers weigh economic data against inflation concerns and market stability. Financial analysts noted that the broad-based nature of the decline reflected shifting investor sentiment rather than positioning extremes that might have amplified the move.

Despite Friday's sharp decline, some market observers suggested that single-day selloffs of this magnitude are typically not indicative of longer-term market tops during broader rally periods.