A broad sell-off in technology companies pulled stocks lower on Wall Street Friday, capping off the market’s worst week since late June. The S&P 500 fell 1.1% to 7,659.44, and its roughly 2% drop for the week wiped out its gains from the previous week, when it had set an all-time high.
The Nasdaq composite, heavily weighted with technology stocks, sank 2.1% on Friday to 26,140.03 and posted its first weekly loss in five weeks — down about 4.5% for the week, its worst performance since the week ended June 26. The Dow Jones Industrial Average held up better, closing 0.3% lower on Friday at 52,002.41, and actually gained about 0.7% for the week, showing the selling was concentrated in growth stocks rather than spread across the market.
Wall Street’s bruising week reflected mounting worries about how long the frenzy over the artificial intelligence buildout can last — and whether the companies at its center can keep financing it.
Wall Street’s AI Selloff Deepens in Chips and Software
Chipmakers were among the biggest decliners Friday. Micron Technology fell 5.6%, Advanced Micro Devices dropped 6%, Broadcom lost 4.5% and Intel gave up 5.8%. The iShares Semiconductor ETF fell for a ninth consecutive day, its longest losing streak in two decades, according to Barron’s.
The pain spread to software stocks on Friday, after investors had treated software earlier in the week as a safer haven than AI-linked chips. Twilio plunged 10.6% on Friday, the biggest fall in the S&P 500 that day. Oracle lost 5%, ServiceNow fell 4% and Salesforce dropped 2%. For the week, CrowdStrike and Snowflake each lost about 17%, while Palo Alto Networks and Cloudflare each shed roughly 18%.
At the center of the storm was CoreWeave, the AI cloud company, which fell nearly 12% on Friday and about 24% for the week as investors worried about its debt load of more than $51 billion. Meta, which fell 3.7% on Friday, and Tesla will kick off Magnificent Seven earnings just as AI spending comes under heightened scrutiny.
What Wall Street Watches Next
Investors are now worried that tech giants, which have relied on debt markets to finance an investment spree into AI infrastructure, may not be able to keep borrowing and spending as heavily with bond yields in markets worldwide recently climbing to their highest levels in years. The 10-year Treasury yield ended the week at 5.097%, and the 30-year yield marked its biggest one-week decline to close at 5.436%.
“The market is burnt out on AI,” said Nicholas Colas, co-founder of DataTrek Research. “Equity investors are not used to being venture investors. Investors are saying, ‘It’s enough already. You all want to go off and build this science project? That’s awesome but we don’t have to be along for the ride.'”
The CBOE Volatility Index surged above 20, a level viewed as a threshold signaling heightened volatility. Adding to the pressure, oil prices climbed amid rising US–Iran tensions, with WTI crude settling at $101.41 a barrel and Brent at $109.86. Netflix fell 2.9% after announcing that Chief Content Officer Bela Bajaria would be replaced by Peter Rice, days after revealing plans to lay off about 6% of its workforce — nearly 1,000 positions.
For Wall Street, the central question is whether AI’s biggest spenders can produce earnings to match the outlay. Analysts at major Wall Street firms will scour Big Tech’s upcoming results for capital-expenditure guidance, while traders across Wall Street keep one eye on bond yields and another on oil. If the numbers disappoint, the selloff that defined this week on Wall Street could deepen further.
Not everything fell: energy stocks held up, with Exxon rising 2.5% and Chevron adding 2.6%. But with Big Tech earnings about to test the AI spending narrative directly, Wall Street heads into next week with the debate fundamentally changed — no longer just about how much AI demand can grow, but whether the returns justify the bill.