Wall Street Falls as Chip Stocks Slide and Brent Crude Hits $87/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ US stocks moved lower Friday as renewed volatility among chipmakers and other artificial intelligence companies weighed on global markets. Brent crude climbed nearly 4% as expanded US strikes against Iran raised concerns about oil shipments through the Strait of Hormuz. Netflix, Intuitive Surgical and SpaceX also fell, while Treasury yields eased following encouraging consumer sentiment data.

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Quick Look

• The S&P 500 fell 0.5% after losing as much as 1.4% earlier Friday.
• The Dow dropped 149 points, or 0.3%, after an early decline of 566 points.
• The Nasdaq composite declined 0.7%.
• Applied Materials fell 2.6%, while Micron Technology recovered to gain 4.6%.
• Markets dropped 6.5% in Taipei, 4% in Tokyo and 3% in Shanghai.
• Taiwan Semiconductor Manufacturing Co. sank 7.3%.
• China’s Moonshot introduced its open-source Kimi K3 artificial intelligence model.
• Netflix shares fell 6.8% following its quarterly earnings report.
• Intuitive Surgical dropped 12.6%, despite exceeding quarterly expectations.
• SpaceX declined 4.1% and reached its lowest level since its Nasdaq debut.
• Brent crude rose 3.9% to $87.48 per barrel, compared with about $76 a week earlier.
• The 10-year Treasury yield eased to 4.54% from 4.57%.
• US consumer sentiment reached its highest preliminary reading since February.

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Deep Look

AI Stocks Pull Wall Street Lower

NEW YORK — US stocks declined Friday as semiconductor companies and other major beneficiaries of the artificial intelligence boom continued to experience sharp price swings. Oil prices advanced as the expanding war with Iran increased concerns about global crude supplies.

The S&P 500 fell 0.5% after dropping as much as 1.4% during morning trading. The index was heading toward its first weekly loss in three weeks and only its third losing week since March.

The pullback came just days after the S&P 500 moved within 0.5% of its record high.

The Dow Jones Industrial Average was down 149 points, or 0.3%, as of 12:53 p.m. Eastern time. The index fluctuated between an early loss of 566 points and a modest gain.

The technology-heavy Nasdaq composite fell 0.7%.

Chip Stocks Remain at Center of AI Volatility

Semiconductor stocks continued to drive market volatility amid concerns about high valuations and the sustainability of demand for memory chips and processors.

Investors have poured money into companies connected to artificial intelligence, expecting the technology to deliver major improvements in profits and productivity. Questions about whether AI can meet those expectations have recently placed pressure on some of the market’s biggest winners.

Applied Materials fell 2.6%, reducing its gain for 2026 to approximately 112%.

Micron Technology rose 4.6% after declining earlier in the trading session.

Asian Technology Markets Tumble

The technology sell-off extended across global markets Friday morning.

Taipei’s stock index plunged 6.5%, while Tokyo fell 4% and Shanghai lost 3%. Taiwan Semiconductor Manufacturing Co., one of the world’s most important chipmakers, dropped 7.3%.

South Korea’s market was closed for a holiday, providing a temporary break from recent volatility.

The country’s Kospi index has been particularly exposed to fluctuations in AI-related stocks because two technology giants—Samsung Electronics and SK Hynix—dominate the market.

During the past week, the Kospi recorded a 6.2% daily gain but also suffered separate declines of 6.4% and 8.9%.

European stock indexes experienced smaller moves because they generally have less exposure to technology and artificial intelligence companies.

China’s Kimi K3 Model Adds to Market Concerns

Investors were also responding to the release of Kimi K3, an open-source artificial intelligence model developed by Chinese startup Moonshot.

The announcement renewed concerns that lower-cost Chinese systems could compete with major Western AI platforms, including ChatGPT and OpenAI’s other products.

The development recalled the market reaction to DeepSeek’s AI model in early 2025. Another inexpensive competitor could weaken demand for the costly computer chips and components used to build and operate leading Western models.

Netflix Falls Following Earnings Report

Several large companies declined following their latest quarterly financial reports, adding pressure to Wall Street.

The moves contrasted with earlier trading during the week, when companies including Goldman Sachs and BlackRock rallied after reporting stronger spring profits than analysts had expected.

Netflix sank 6.8% after its latest quarterly revenue narrowly missed Wall Street forecasts. The streaming company’s profit exceeded expectations, but its revenue and profit projections for the summer came in below estimates.

Intuitive Surgical Drops Despite Earnings Beat

Intuitive Surgical fell 12.6%, even though the manufacturer of robotic surgical systems reported quarterly results that surpassed expectations.

Analysts expressed concern about slowing growth in medical procedures following the expiration of enhanced tax credits that had reduced health insurance costs for many people enrolled through the Affordable Care Act.

The end of those subsidies could make health care less affordable for some patients and potentially reduce demand for certain procedures.

SpaceX Slides Following Aborted Starship Test

Elon Musk’s SpaceX dropped 4.1% and touched its lowest price since the company’s shares began trading on the Nasdaq slightly more than a month ago.

SpaceX, which owns the xAI business, has been caught in the broader volatility surrounding artificial intelligence stocks.

The decline also followed the last-second cancellation of a Starship test flight Thursday. The company aborted the launch approximately one second before the rocket was scheduled to lift off.

Brent Crude Climbs Toward $88

Rising oil prices created additional pressure for the stock market.

Brent crude, the international benchmark, climbed 3.9% to $87.48 per barrel. The price stood at approximately $76 a barrel only a week earlier.

The United States expanded its military campaign against Iran early Friday, striking additional bridges and collapsing a tower at a major Iranian port.

The attacks intensified concerns about whether oil tankers would be able to continue traveling through the Strait of Hormuz. The strategic waterway carries crude oil from the Persian Gulf to customers around the world.

Any disruption to tanker traffic through the strait could reduce supplies and push global energy prices even higher.

Higher Oil Prices Create Inflation Concerns

The recent oil rally has pushed Treasury yields higher by increasing concerns about inflation.

Higher yields can slow economic activity by making mortgages, corporate borrowing and other forms of credit more expensive. They can also make bonds more attractive relative to stocks, placing downward pressure on equity prices.

The average rate on a 30-year mortgage has already reached its highest level in nearly a year.

Treasury yields eased Friday, however. The yield on the 10-year Treasury note fell to 4.54% from 4.57% late Thursday.

US Consumer Sentiment Improves

A preliminary report from the University of Michigan indicated that US consumer sentiment improved more than economists anticipated.

The survey’s initial July reading reached its highest level since February, while consumers’ expectations for future inflation declined.

Inflation expectations are important to the Federal Reserve as policymakers consider raising interest rates to control price increases. Stable expectations can help prevent consumers and businesses from taking actions in anticipation of inflation that could cause prices to rise further.

Joanne Hsu, director of the survey, said much of the improvement in sentiment reflected recent declines in gasoline prices.

The improvement could come under pressure if gasoline costs begin rising again in response to the latest surge in crude oil prices.

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