Traders work on the New York Stock Exchange (NYSE) on July 9, 2026 in New York.
Spencer Platt | Getty Images
Stocks fell on Friday as growing concerns over artificial intelligence costs led to a decline in technology benchmarks, sending major indexes into a losing week.
Nasdaq Composite fell 2.3% as technology stocks came under scrutiny. Dow Jones Industrial Average fell by 169 points, or 0.3%, while S&P 500 Index lost 1.2%.
iShares Semiconductor ETF (SOXX) And VanEck Semiconductor ETF (SMH) both fell more than 5%. Shares Applied materials And LAM Research decreased by about 5%, while Intel, UAC Corporation And Hand were about 4% lower. micron lost more than 2%, and Nvidia lost more than 3%.
These losses added to the decline seen in the previous session, which was also led by semiconductors. Adding to this pessimism, Chinese startup Moonshot AI has introduced a new model that it says closes the gap with the best offerings in the US.
The SMH index fell 10% for the week, its third weekly decline in four weeks. Major stock indexes also fell for the week, with the S&P 500 falling nearly 2% and the Dow and Nasdaq falling more than 1% and more than 3%, respectively.
In a note published Friday morning, BBH strategists said investors are “increasingly questioning the sustainability of the ongoing AI capital spending boom.”
“The (Bank for International Settlements) annual economic report warns that boom and bust cycles are a regular feature of past investment surges driven by transformative technologies,” they said.
Meanwhile, Barclays strategists didn’t seem concerned about volatility in the tech market in a report on Friday.
“While technology volatility may continue in the near term, we believe the repositioning should ultimately prove beneficial by creating more attractive entry points for long-term investors focused on the structured AI theme,” they said.
In addition to chips, promotions Netflix were a significant underperformer on Friday, falling more than 10% after the company reported second-quarter results that were roughly in line with expectations as well as a disappointing profit forecast.
The further escalation of the US-Iran war also remained in the spotlight, and oil prices rose in its wake. US West Texas Intermediate Crude Oil Futures last traded above $81 a barrel, while the international benchmark Brent oil futures were above $86.
Kuwait said Friday Iran had attacked a power plant and desalination plant, and U.S. Central Command said overnight it had completed a sixth straight night of strikes against Iran, hitting dozens of military targets including logistics infrastructure and maritime capabilities.
Iranian officials also said Friday they had carried out strikes against U.S. forces in Syria and Bahrain, expanding Tehran’s attacks into the Middle East.
It comes as a fragile truce reached last month breaks down, once again disrupting energy flows through the strategic Strait of Hormuz, through which about 20% of global oil traffic typically passes.