Key facts
- U.S. stock index futures fell as chip stocks continued to decline.
- Netflix shares dropped after issuing a weak third-quarter forecast.
- The Philadelphia SE Semiconductor index hit a nearly two-month low.
- Geopolitical tensions escalated with fresh attacks on U.S. facilities in the Gulf.
- President Trump accused China of election meddling.
U.S. stock index futures declined on Friday as a selloff in chip stocks intensified, prompting investors to question the sustainability of the year's AI-driven rally. Netflix's weak forecast added to market pressure.
After a strong performance that pushed Wall Street's main indexes to record highs, investors began retreating from semiconductor stocks amid renewed concerns about the scale of AI-related spending. Memory-chip makers, which had been among the year's top performers, experienced significant drops for a second consecutive day in premarket trading. The Philadelphia SE Semiconductor index reached a nearly two-month low on Thursday and was on track for its worst weekly performance since March 2025.
Netflix's shares fell 9.4% after the streaming service projected third-quarter revenue and earnings below analyst expectations. The increased market volatility pushed the CBOE Volatility Index, a measure of investor fear, to its highest level in over a week.
In premarket trading, Dow E-minis were down 0.67%, S&P 500 E-minis were down 1.03%, and Nasdaq 100 E-minis were down 2.05%. Thursday's session also saw losses in chipmakers drag the broader market lower, and the main indexes were heading for weekly declines despite an initially positive start to the second-quarter earnings season from major banks and benign inflation data earlier in the week.
Geopolitical risks also contributed to market sentiment. Iran announced fresh attacks on U.S. facilities in the Gulf following several nights of U.S. strikes on Iranian military targets, raising concerns about energy flows through the Strait of Hormuz. Additionally, U.S. President Donald Trump's accusations of Chinese interference in U.S. elections could complicate upcoming diplomatic discussions.
Among other premarket movers, Intuitive Surgical's stock fell 10.8%, despite the company exceeding Wall Street's profit and revenue estimates for the second quarter due to strong demand for its surgical systems.