Key facts
- U.S. stock indexes opened lower Friday 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.
- The CBOE Volatility Index rose, indicating increased investor anxiety.
- Geopolitical tensions, including attacks on U.S. facilities in the Gulf and accusations of Chinese election meddling, contributed to market sentiment.
Wall Street's main indexes opened lower on Friday, with a deepening selloff in chip stocks and a weak forecast from Netflix adding to investor concerns about the sustainability of the year's AI-fueled rally. The Dow Jones Industrial Average fell 126.5 points, or 0.24%, at the open to 52,426.46. The S&P 500 fell 86.2 points, or 1.14%, at the open to 7,447.52, while the Nasdaq Composite dropped 469.7 points, or 1.81%, to 25,412.259 at the opening bell.
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.
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.