US Stocks Mixed as Chip Sector Weakens; Philly Fed Index Drops Over 4%

U.S. stock markets experienced a mixed close on Friday, with the tech-heavy Nasdaq and the Philadelphia Semiconductor Index suffering significant losses. The Nasdaq fell 0.64%, while the Philadelphia Semiconductor Index plunged 4.25%. This downturn was largely driven by weakness in chip stocks, with investors showing caution towards increased AI spending by major tech companies.

Alphabet's announcement of a substantial increase in capital expenditure plans on Wednesday, coupled with upcoming earnings reports from Microsoft and Meta next week, contributed to investor apprehension. Intel, despite forecasting better-than-expected quarterly profits and revenue, saw its stock drop 7.9% on Friday. Other semiconductor companies also followed suit, with Broadcom down 2.7%, Nvidia off 0.92%, AMD down 3.29%, and Micron declining 7%.

Meanwhile, falling oil prices provided some support to the broader market. Benchmark Brent crude fell below $100 per barrel after five consecutive days of gains, influenced by news that China is pushing for the resumption of stalled U.S.-Iran peace talks. The Dow Jones Industrial Average managed a gain of 235.60 points, or 0.46%, closing at 51947.25. The S&P 500 saw a modest increase of 0.05%, ending the day at 7411.98.

Despite the Dow's slight gain, both the S&P 500 and the Nasdaq closed lower for the second consecutive week, down 0.6% and 2.1% respectively. The Dow also extended its losing streak to three weeks, falling 0.4% this week. Taiwan Semiconductor Manufacturing Company's ADR (American Depositary Receipt) fell nearly 3%, closing at $403.41.