Wall Street Extends Losses as Tech Weakness and Geopolitical Tensions Weigh

U.S. equities extended their decline on Friday, with all major benchmarks posting notable losses as the selling pressure that emerged in the prior session persisted. The technology-heavy Nasdaq Composite led the downturn, sliding 1.4% to close at 25,520.24. The S&P 500 fell 1% to 7,457.69, while the Dow Jones Industrial Average dropped 0.8% to 52,146.42.

For the week, the Nasdaq tumbled 2.9%, the S&P 500 lost 1.6%, and the Dow declined 0.9%.

Early weakness was concentrated in the technology sector, which continued to struggle following Thursday’s sharp pullback. Netflix shares plunged 7.3% after the streaming company issued disappointing third-quarter guidance, overshadowing second-quarter results that were roughly in line with expectations. The drop weighed heavily on the broader tech complex.

Valuation concerns also haunted the sector ahead of a critical earnings week featuring reports from Alphabet, IBM, Tesla, and Intel. “With sentiment brittle, investors are becoming increasingly wary of valuations in the AI and technology sector—most notably in the memory chip space where share prices have surged to unprecedented levels this year,” noted AJ Bell investment director Russ Mould.

Selling pressure broadened as the session progressed, fueled by a sharp spike in crude oil prices. U.S. futures surged above $80 per barrel amid escalating conflict in the Middle East. Reports indicated Tehran launched strikes across the Gulf region following consecutive nights of U.S. strikes targeting Iranian positions near the Strait of Hormuz.

Sector Performance

Airline stocks were among the hardest hit, with the NYSE Arca Airline Index plunging 3.5% on the surge in fuel costs. Brokerage shares also faced heavy selling, dragging the NYSE Arca Broker/Dealer Index down 2.3%.

Semiconductor stocks extended their recent slide, pulling the Philadelphia Semiconductor Index down 1.6% to its lowest close in nearly two months. Housing, software, and retail shares also declined notably. Conversely, oil producers and computer hardware stocks posted strong gains.

Global Markets

In Asia-Pacific trading, markets moved sharply lower. Japan’s Nikkei 225 plummeted 4%, while China’s Shanghai Composite Index tumbled 3.1%. European markets were mixed: the French CAC 40 fell 0.5%, the German DAX slipped 0.3%, but the U.K.’s FTSE 100 edged up 0.3%.

Bond Market

Treasuries rebounded from the previous session’s sell-off. The yield on the benchmark 10-year note fell 2.8 basis points to 4.541%.

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