Nasdaq 100 Logs Worst Week In 18 Months As Chip Selloff Deepens
The Nasdaq 100 recorded its worst weekly performance in over eighteen months on Friday, driven by a sharp decline in semiconductor stocks. The broader U.S. equity market also closed lower, with the S&P 500 dropping 1.1% and the Dow Jones Industrial Average falling 0.3%. The Russell 2000, which tracks small-cap companies, ended the session 1.7% lower.
The Nasdaq 100 recorded its worst weekly performance in over eighteen months on Friday, driven by a sharp decline in semiconductor stocks. The broader U.S. equity market also closed lower, with the S&P 500 dropping 1.1% and the Dow Jones Industrial Average falling 0.3%. The Russell 2000, which tracks small-cap companies, ended the session 1.7% lower.
Weakness in the chip sector was the primary factor dragging down the Nasdaq 100, which lost 2.5% on Friday. The VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF both declined between 3% and 4%, following a drop in shares of Micron Technology, Nvidia, and Broadcom. The broader Vanguard Information Technology ETF (VGT) fell 3%, while the Roundhill Memory ETF (DRAM) dropped approximately 6% as most memory chip stocks closed in the red.
Market anxiety over the debt levels required to finance artificial intelligence expansion contributed to the selling pressure. CoreWeave, a neocloud provider, saw its stock tumble almost 12% on Friday, extending its weekly losses to 25% as its total debt load surpassed $51 billion. Michael Rosen, chief investment officer at Angeles, told CNBC that while rising debt issuance warrants close monitoring, current levels are not yet at a point of systemic danger. He noted that increased debt is something to observe but stated that the market is not remotely close to excessiveness.
In contrast to bearish sentiment on some platforms, Nvidia chief executive Jensen Huang publicly advocated for the AI industry during an event in Berlin. Speaking to Bloomberg, Huang stated that the benefits of the technology would soon outweigh investor concerns, describing the current moment as the beginning of a positive impact on every industry and country.
Individual stocks also moved on specific corporate news. Apple Inc. is preparing to challenge U.K. antitrust regulators over proposed rule changes intended to limit its control over iPhone tap-to-pay technology. Shares of Strategy (MSTR), a Bitcoin treasury firm backed by Michael Saylor, reversed Thursday’s gains after MSCI announced it would adopt a new screening approach for its global benchmark indexes, potentially putting the company’s index membership at risk.
Uber shares attracted attention after Guggenheim reiterated its 'Buy' rating and $125 price target, describing the stock as a compelling investment opportunity. Meanwhile, Tesla’s unveiling of its next-generation Roadster on Thursday, which featured a dramatic launch demonstration, was viewed by analysts as a precursor to a potential merger with SpaceX.
ExxonMobil shares advanced modestly on Friday after the company reported that higher refining margins could add approximately $4.5 billion to its third-quarter results compared with the prior quarter.
Retail sentiment on Stocktwits for major exchange-traded funds including QQQ, SPY, and DIA was recorded as 'bearish' with 'high' message volumes. S&P 500 futures slipped 0.2% and Nasdaq-100 futures dropped 0.7% following the close, while Dow futures rose slightly by 22 points.