The Dow Jones Industrial Average fell 191.76 points, or 0.36%, to 52,361.21 in morning trading Friday, as a deepening selloff in semiconductor stocks and a disappointing forecast from Netflix weighed on Wall Street heading into the close of a turbulent trading week.
The declines were far steeper elsewhere on the market. The S&P 500 fell roughly 1.27% and the Nasdaq Composite tumbled about 2.36% in early trading, putting both indexes, along with the Dow, on track for weekly losses as the technology-heavy Nasdaq bore the brunt of renewed selling in chip-related names. The Philadelphia Semiconductor Index, a closely watched gauge of chip-sector performance, plunged more than 5% and entered bear-market territory Friday, extending a rough stretch that has now stretched across multiple sessions this month.
The chip selloff carried over from a difficult overnight session in Asia, where Japan’s Nikkei 225 dropped roughly 4% and other regional benchmarks pointed lower as investors continued reassessing whether massive spending on artificial intelligence infrastructure can be justified by current valuations across the technology sector. That skepticism has increasingly weighed on markets throughout July, even as several major technology companies continue posting strong underlying earnings results.
Adding to Friday’s cautious tone, Netflix shares fell more than 8% in extended trading Thursday after the streaming giant forecast a second consecutive quarter of slowing sales growth, disappointing investors who had grown accustomed to the company’s steady subscriber and revenue momentum in recent quarters. The disappointing guidance rippled into broader market sentiment overnight, compounding concerns already building around the technology sector’s ability to sustain its recent pace of growth.
Friday’s losses followed an already difficult session Thursday, when the Nasdaq fell 1.6% as chip stocks weakened again and investors parsed a mix of corporate earnings and macroeconomic signals. The pullback in chip stocks has become one of the defining storylines of the market’s performance so far this month, with sharp single-day swings in both directions as investors debate the durability of the artificial intelligence investment boom that has powered much of the broader market’s gains over the past year.
Individual stock performance within the Dow has varied significantly so far in 2026. Salesforce has emerged as the index’s worst-performing component this year, down more than 35% year-to-date, according to data from Investing.com, reflecting a sharp reversal for the enterprise software giant amid broader concerns about softening demand in the technology sector. The stock’s decline stands in stark contrast to some of the index’s stronger performers, underscoring the wide dispersion in performance among the Dow’s 30 components even as the broader index has posted more modest overall movement.
This week’s trading has unfolded against a backdrop of escalating geopolitical tension in the Middle East, which has added further volatility to markets already grappling with uncertainty over AI valuations. Crude oil prices climbed earlier in the week after the United States and Iran exchanged renewed military strikes, with the conflict centered on the Strait of Hormuz, a critical corridor for global oil shipments. Markets grew increasingly on edge after the U.S. renewed strikes near the strait over the weekend, and Iran retaliated with strikes against U.S. allies including Kuwait, Jordan and Qatar, sending crude prices higher and adding another layer of risk for investors already contending with a volatile technology sector.
Earlier in the week, inflation data offered a brief respite for markets. Tuesday’s June consumer price index reading showed prices falling 0.4% for the month, bringing the annual inflation rate down to 3.5%, a softer result than the 3.8% economists had expected. The unexpectedly mild inflation print briefly eased concerns about further Federal Reserve rate increases, with the probability of a rate hike at the central bank’s July meeting falling to roughly 17% from 42% the day before, according to the CME Group’s FedWatch tool. Traders, however, continued to price in a nearly 60% chance of a rate increase at the Fed’s September meeting, reflecting lingering uncertainty about the path of monetary policy given the volatile mix of geopolitical and economic crosscurrents shaping the outlook.
Skyler Weinand, chief investment officer at Regan Capital, cautioned earlier in the week that the reprieve in inflation data might prove temporary given the ongoing conflict in the Middle East. He noted that while the softer inflation print suggested the earlier price pressures tied to the Iran conflict were beginning to fade, renewed escalation in recent days could reverse that trend.
Corporate earnings have added further volatility to the week’s trading. International Business Machines shares fell sharply earlier in the week after the company warned that second-quarter profits would come in below expectations, citing softer-than-anticipated demand across its software and infrastructure businesses. That warning weighed heavily on the Dow given IBM’s inclusion in the price-weighted index, though semiconductor stocks staged a partial rebound in the sessions that followed, with the VanEck Semiconductor exchange-traded fund climbing more than 2% at one point as investors briefly returned to some of the sector’s more beaten-down names.
With bank earnings season now in full swing and Federal Reserve officials continuing to weigh incoming inflation and growth data, investors are likely to remain focused on how corporate results and geopolitical developments interact in shaping market direction heading into the following week. For now, Friday’s session reflects a market still working through competing pressures: renewed doubts about the sustainability of the artificial intelligence trade, elevated oil prices tied to unresolved tensions in the Middle East, and a mixed but generally resilient underlying economic picture that has so far kept the broader indexes from suffering more severe or sustained declines.
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