Markets fall as chip sell-off deepens; Netflix slides 11%
U.S. stocks fell Friday as a deepening chipmaker sell-off and a sharp Netflix drop weighed on sentiment, according to Yahoo Finance and other market reports. The Nasdaq led losses while semiconductor indexes tumbled, putting major averages on track for a losing week amid fresh AI spending doubts.
Key Takeaways
- Major U.S. indexes fell Friday, with the Nasdaq leading declines as chip stocks extended their sell-off.
- Netflix shares slid roughly 11% after a weaker-than-expected third-quarter outlook, even as second-quarter results were roughly in line.
- Semiconductor gauges such as the PHLX Semiconductor Index and chip ETFs dropped more than 3%, reflecting fresh doubts about AI spending.
- Oil prices rose again as Middle East tensions, including the conflict involving Iran, kept energy markets elevated.
Why are S&P 500 and Nasdaq stocks falling today?
U.S. equities declined on Friday as semiconductor weakness and broader technology pressure dragged the major averages lower. According to Yahoo Finance live coverage, the Dow Jones Industrial Average fell about 1%, the S&P 500 dropped roughly 0.8% to more than 1%, and the Nasdaq Composite shed around 1.6% or more in early trading.
CNBC similarly reported the Nasdaq Composite down about 1.8%, the Dow off roughly 519 points or 1%, and the S&P 500 lower by about 1.2%, putting the major averages on pace for a losing week. Chip-related selling remained the central driver after Thursday losses tied to concerns over artificial-intelligence capital spending.
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What is driving the chipmaker sell-off?
Chip stocks were again at the center of the weakness. Yahoo Finance reported the PHLX Semiconductor Index tumbling more than 3% on Friday and entering a bear market after Asian markets fell, including a roughly 4% drop in Japan’s Nikkei 225.
CNBC said the iShares Semiconductor ETF and the VanEck Semiconductor ETF were both down more than 3%. Applied Materials and Lam Research declined around 5%, while Intel, KLA and Arm were about 4% lower; Micron lost more than 2% and Nvidia more than 3%.
An Associated Press report carried by LancasterOnline said the sell-off was worldwide, with indexes tumbling about 6.5% in Taipei, 4% in Tokyo and 3% in Shanghai. Investors have grown wary that chip valuations rose too far and that demand for memory and processors may not hold if AI delivers less profit and productivity than expected.
Why did Netflix shares slide about 11%?
Netflix was a major market laggard. Yahoo Finance said the stock declined by about 12% in the first minutes of trading after a disappointing third-quarter revenue forecast, as the streamer cited a “dynamic and competitive” entertainment landscape.
CNBC reported Netflix falling more than 10% after second-quarter results that were roughly in line with expectations, alongside a disappointing earnings forecast. The company earned 80 cents per share on revenue of $12.56 billion, versus LSEG estimates of 79 cents and $12.59 billion. Netflix also said it would cut back how often it releases its “What We Watched” engagement reports.
How are oil prices and global markets adding pressure?
Beyond tech, energy and geopolitics added to the risk-off mood. The LancasterOnline/AP account said oil prices continued to climb because of the war with Iran, with Brent crude up about 2.9% to $86.70, versus roughly $76 a week earlier, and near a one-month high on worries about tanker traffic and Persian Gulf shipments.
Together, the chip rout, Netflix’s outlook miss and higher oil prices left investors reassessing both the AI trade and near-term inflation risks heading into the weekend.