U.S. stocks closed sharply lower on Friday, capping a rough week for Wall Street as a deepening selloff in semiconductor stocks combined with rising oil prices to unsettle investors. All three major indexes finished in the red, with technology and chip-related names leading the declines.
What Moved Markets
The Dow Jones Industrial Average fell 406.55 points, or 0.77%, to close at 52,146.42. The S&P 500 dropped 76.07 points, or 1.01%, to finish at 7,457.69. The Nasdaq Composite took the hardest hit, sliding 361.70 points, or 1.40%, to close at 25,520.24. For the week, the S&P 500 lost more than 1.5% and the Nasdaq fell nearly 3%, while the Dow slipped about 1%.
The biggest drag came from semiconductor stocks, which extended a selloff that has pushed the group toward a bear market. Worries that the artificial intelligence spending boom may be harder to justify intensified this week, with an industry gauge of chip stocks down roughly 20% from its recent record – on pace for its worst week since the tariff-driven selloff of April 2025. The release of a powerful new open-source AI model added to concerns about pricing power and demand for the chips that have powered this year’s rally.
Oil prices added to the day’s pressure. Brent crude climbed toward $86.72 a barrel and U.S. crude rose to $81.43, both on pace for weekly gains of nearly 14%, as tensions between the U.S. and Iran escalated and traders weighed the risk of disruptions to shipping through the Red Sea and the Strait of Hormuz.
Notable Movers
Netflix (NFLX) fell more than 10% after its second-quarter report. Earnings of $0.80 per share edged past estimates, but revenue of $12.56 billion came in just short of the $12.6 billion Wall Street expected, and investors punished the stock despite the narrow beat on profit.
Caterpillar (CAT) led Dow decliners, dropping 4.40% amid broader industrial weakness. Nvidia (NVDA) fell 3.78% as the chip selloff continued, and Goldman Sachs (GS) slid 3.15%.
Not every stock fell. Travelers Companies (TRV) jumped 6.43%, UnitedHealth (UNH) rose 2.62%, and Walmart (WMT) gained 2.10%, offering some ballast to the broader indexes. Wells Fargo (WFC) also stood out on the earnings front, reporting profit of $2.00 per share, up 25% from a year earlier, on revenue of $22.62 billion, up 8.6%.
Looking Ahead
Earnings season is off to a strong start on paper – of the 47 S&P 500 companies that have reported so far, 95% have topped earnings estimates – but investors are increasingly focused on revenue and guidance rather than headline beats, as Friday’s reaction to Netflix showed. Next week brings a fuller slate of second-quarter results along with continued attention on oil prices and any developments in the Middle East. Investors will also be watching whether the semiconductor selloff stabilizes or continues to weigh on the broader market, along with fresh readings on consumer sentiment and inflation expectations that could shape the outlook for Federal Reserve policy.