Chip Stock Slump Shakes AI Rally, Netflix Forecast Adds Pressure

U.S. stock index futures dropped as a decline in chip stocks deepened amid investor concerns over AI spending. Netflix's weak forecast further impacted the market, while geopolitical tensions in the Gulf and U.S.-China relations added to the uncertainty. Major indexes are poised for weekly declines.

U.S. stock index futures fell sharply on Friday, exacerbated by a slump in semiconductor stocks that led investors to reconsider the longevity of this year’s AI-driven surge. Netflix’s disappointing earnings forecast added to market woes.

Chip stocks, particularly memory-chip producers like SanDisk and Micron Technology, faced another day of steep declines, bringing the Philadelphia SE Semiconductor index to new lows. Netflix also saw a significant drop, affecting market sentiment with its reduced third-quarter earnings projection.

In addition to economic concerns, geopolitical tensions heightened volatility as Iran's military actions and U.S.-China relations added complexity. This resulted in futures for major indexes like the Dow and Nasdaq declining substantially despite positive early earnings reports from major banks.