Spy stock falls as chip sell-off and Netflix sink markets
The spy stock and broader U.S. indexes are falling Friday as a deepening semiconductor sell-off and worries about AI spending hit tech, while Netflix slid about 11% after a disappointing forecast. Nasdaq losses led the retreat, putting major averages on pace for a losing week.
Key Takeaways
- The S&P 500, Dow, and Nasdaq fell Friday as chipmakers extended a multi-day rout tied to AI spending doubts.
- Semiconductor ETFs SOXX and SMH dropped more than 5%, with Nvidia, Intel, and equipment makers among the hardest hit.
- Netflix shares plunged roughly 11% after in-line second-quarter results and a weak third-quarter outlook.
- Strategists say investors are questioning whether the AI capital expenditure boom can keep justifying rich tech valuations.
Why is the spy stock under pressure today?
Pressure on the spy stock — the exchange-traded fund that tracks the S&P 500 — reflects a broad risk-off move in U.S. equities. According to CNBC’s live market updates, the S&P 500 lost about 1.2% Friday as tech led declines and major averages headed for a losing week.
Yahoo Finance reported that futures weakness carried into the cash session, with the Nasdaq Composite hammered by chips and the Dow and S&P 500 also lower. Week to date, CNBC noted the S&P 500 was off nearly 2%, with the Dow down more than 1% and the Nasdaq more than 3%.
The New York Times framed the same session as stocks sinking on anxiety about tech and A.I. spending, after an Asia-led chip sell-off spilled into Europe and U.S. markets.
What is driving the chipmaker sell-off and AI jitters?
Chip stocks remained the epicenter. CNBC said the iShares Semiconductor ETF (SOXX) and VanEck Semiconductor ETF (SMH) were both down more than 5%, with Applied Materials and Lam Research around 5% lower and Intel, KLA, and Arm about 4% weaker. Nvidia fell more than 3%, and Micron lost more than 2%.
SMH was down about 10% for the week, on pace for its third weekly decline in four weeks. Yahoo Finance added that the PHLX Semiconductor Index tumbled more than 3% and entered bear-market territory after Asian markets slumped, including a roughly 4% drop in Japan’s Nikkei 225.
Brown Brothers Harriman strategists told CNBC investors are “increasingly questioning the sustainability of the ongoing AI capital expenditure boom.” Chinese startup Moonshot AI also unveiled a new model it says narrows the gap with top U.S. offerings, adding to competitive nerves. For more coverage of AI market swings, see Future Tech & AI Wonders.
Why did Netflix shares slide about 11%?
Netflix was a major non-chip laggard. Yahoo Finance showed the stock down about 11% after its third-quarter revenue forecast disappointed Wall Street. CNBC reported the streamer posted second-quarter results roughly in line with expectations — 80 cents per share on $12.56 billion in revenue versus LSEG estimates of 79 cents and $12.59 billion — but issued a disappointing earnings forecast.
The company also said it would cut how often it releases its “What We Watched” engagement reports. Management pointed to a “dynamic and competitive” entertainment landscape as it battles for growth.
Barclays strategists, cited by CNBC, argued near-term tech volatility could still create healthier entry points for long-term investors focused on the structural AI theme — even as Friday’s tape kept the spy stock and tech-heavy indexes under clear selling pressure.