Stock markets fall as chips and Netflix drag indexes lower
U.S. stock markets fell again on Friday and headed for a losing week, led by a sharp sell-off in chipmakers while Netflix plunged after its forecast failed to calm growth worries. Major indexes were lower as investors questioned heavy AI spending and digested fresh earnings. Chip weakness and a streaming miss put the week on track for losses across major benchmarks, according to CNBC.
Key Takeaways
- The S&P 500, Nasdaq and Dow were lower Friday, with all three on track for weekly declines.
- Semiconductor shares led the pressure, with the VanEck Semiconductor ETF (SMH) falling more than 4% on the day.
- Netflix plunged after its outlook failed to ease concerns that growth is slowing.
- Fresh competition from a new Chinese open AI model added to jitters about heavy tech spending.
- Rising oil prices tied to Middle East escalation kept another risk on the radar.
Why are stock markets falling this week?
Wall Street sold off again Friday as traders weighed semiconductor moves and fresh quarterly reports. CNBC reported the S&P 500 was down about 0.9%, the Nasdaq Composite dropped about 1.2%, and the Dow Jones Industrial Average traded down about 298 points, or 0.6%.
Week to date, the S&P 500 was off by more than 1%, the Nasdaq had slipped more than 2%, and the Dow had fallen nearly 1%. That put the major benchmarks on course for a losing week after recent resilience in the broader rally.
Yahoo Finance also said U.S. stocks declined Friday with indexes headed for weekly losses, as the semiconductor sector continued to drag markets lower.
How hard did chipmakers hit the indexes?
Chip stocks were at the center of the session. CNBC said the SMH was on pace for its third weekly decline in four weeks, dropping more than 8% over that stretch. On Friday the ETF fell more than 4%, extending a month-to-date slide of more than 17%.
Semiconductors were hit especially hard earlier in the day, though some losses were later retraced. Shares of Applied Materials, Lam Research, Intel, KLA Corp. and Arm Holdings each fell about 4%, while Micron Technology and Nvidia dropped more than 2%, CNBC reported.
Yahoo Finance said the PHLX Semiconductor Index entered a bear market before the sector began to recover in afternoon trading as investors bought the dip. Sentiment was also shaken after Chinese startup Moonshot AI unveiled a new model that it says narrows the gap with top U.S. offerings.
"The latest development is competition from open-source models in China, which are reportedly rivaling the performance of leading offerings from Anthropic and OpenAI, raising fresh concerns about the heavy pace of technology spending," Angelo Kourkafas, senior investment strategist at Edward Jones, told CNBC.
Why did Netflix plunge and what does it mean for streaming?
Alongside chips, Netflix was a major laggard. CNBC said the stock fell more than 6% after the company's forecast failed to ease investor concerns that growth is slowing. Yahoo Finance reported Netflix declined by about 7% after a third-quarter revenue forecast disappointed, as the streaming giant battles a "dynamic and competitive" entertainment landscape.
For viewers and investors following media names, the move underscores how closely markets are watching subscriber growth and guidance this earnings season. More streaming and TV market alerts are tracked in our Streaming & TV Alerts coverage.
What else is weighing on traders right now?
Beyond tech, further escalations in the U.S.-Iran conflict kept oil in focus. CNBC said West Texas Intermediate crude futures were last trading above $81 a barrel, while Brent crude futures were above $86. Strategists still framed the AI pullback as maturing rather than breaking, but warned volatility may stay elevated.