US Stocks Fall, Nasdaq Enters Bear Market as Chip Stocks Tumble

Wall Street stocks extended their slide on Friday, with the Dow Jones Industrial Average closing down 406.55 points, or 0.77%, at 52146.42. The S&P 500 index fell 1.01% to 7457.69, and the Nasdaq Composite dropped 1.4% to 25520.25.

The semiconductor sector faced significant pressure, with the Philadelphia Semiconductor Index plummeting 1.63% to 11673.891. This index has now fallen over 20% from its record high on June 22, officially entering bear market territory. It has experienced its largest weekly drop in over a year, with a decline of more than 18% so far in July.

Market sentiment was affected by reports of a new AI model from Chinese startup Moonshot AI, which claims to narrow the gap with top U.S. products, raising concerns among investors. Consequently, major chipmakers saw their stock prices fall, with Nvidia down 2.21%, AMD down 1.03%, and Intel down 2%.

Adding to the market's woes, Netflix's stock price plunged 7.3% after the streaming giant issued an earnings forecast that fell short of expectations. The broader market also registered weekly losses, with the S&P 500 down 1.6% and the Nasdaq down 2.9% for the week.