There are an estimated 3.7 million infants in America.

None of them have ever seen a deeper selloff across big-cap US technology stocks than that which transpired on Wall Street Friday.

Are you picking up the sarcasm? I sure hope so, because I’m layin’ it on pretty thick.

Prior to the three-day slide punctuated by Friday’s swoon, the Nasdaq 100 was up 80% since the “Liberation Day” lows and 34% from its worst levels during the height of the Iran war selloff in late-March.

Suggesting tech shares — to say nothing of semis specifically — could afford to give a little back would be an understatement of pretty epic proportions.

So, color me a shade disdainful at the feigned gasps across finance-focused social media and the overwrought hand-wringing that typified mainstream market news headlines on Friday afternoon.

As the figure shows, the downdraft was the largest for big-tech since Donald Trump “liberated” Americans from the tyrannical reign of free and open trade.

The trigger was — and I’m sure this is maddening for The White House — a very good jobs report made even better by meaningful upward revisions.

As discussed at some length in the new Weekly, the BLS release makes it significantly more difficult for Kevin Warsh to argue an already far-fetched case for the easier monetary policy Trump wants. Front-end US rates responded accordingly, and STIRS have now fully priced a Fed hike by year-end.

The other Kevin — Hassett — showed up on Bloomberg TV to insist traders are “terribly wrong” to believe Warsh will raise rates. It’s “terribly” inappropriate for Hassett to say that on national television, particularly given that he himself was a candidate for the Fed job.

As far as the flows behind the selloff, this should go without saying but the “snowball effect,” so to speak, was indicative of what Nomura’s Charlie McElligott means when he talks about “real and synthetic negative gamma.”

“All the vol,” as he put it last week, was in tech and semis. As the rally gathered steam, skew and put skew collapsed while call skew screamed higher in all things AI-adjacent as everyone who missed the rebound panic-grabbed for upside exposure.

The figure above shows you call skew (i.e., relative demand for OTM upside optionality versus ATM) in the semi ETF as it stood at the end of May.

On the other side of those melt-up tickets were dealers and market makers sitting with a lot to “sell” in the event of a drawdown.

It’s no surprise that the semi ETF fell nearly twice as much as the Nasdaq 100 into Friday’s rout.

As the figure shows, this was the worst session for SMH since “DeepSeek day” early last year.

As noted here repeatedly in recent weeks, tech, AI and semis were in a spot-up, vol-up regime. That dynamic “often resolves in messy fashion, collapsing under the significant weight of its own delta [when] a modest profit-taking turns into something uglier [on] forced and mechanical selling the lower we go,” McElligott said.

At the same time, recall that more than eight out of every 10 AUM dollars in the leveraged ETF space is allocated in some way shape or form to tech, semis and the AI trade.

Like the semi ETF call skew chart, the figures above are a week old, but they give you a sense of things.

The higher the AUM, the larger the rebalancing flow (i.e., the more pronounced the “synthetic negative gamma” effect).

As McElligott put it several days back, in the event of weakness in semis, tech and the Mag7, “the rebal flows will agnostically turn the other way and need to sell more the lower spot goes.”

Those dynamics — and others like them, which is to say other manifestations of forced unwinds and “pro-cyclical” mechanical selling — always need a trigger.

On Friday, that trigger was a too-hot jobs report and the read-across for front-end rates, STIRs and Fed expectations.