Dow sinks 480 points as AI selloff deepens, chip stocks extend losses

• Semiconductor stocks led losses with Nvidia down 4.3% and the chip sector index near a two-month low, despite recent positive earnings from TSMC and ASML, reflecting broader worries about AI infrastructure spending.
• Netflix plunged 11% after issuing weak third-quarter guidance, triggering concerns about valuation resets across high-multiple technology stocks.
• Escalating U.S.-Iran military strikes disrupted energy flows through the Strait of Hormuz (which carries one-fifth of global oil), pushing WTI crude above $81 and Brent above $86 per barrel.

Market Summary: AI Selloff Intensifies, Chip Stocks Tumble

Key Market Movements:

U.S. markets opened sharply lower on Friday, July 17, 2026, as the AI-driven selloff accelerated. The Dow Jones fell 486 points (-0.9%), the S&P 500 declined 1.1%, and the Nasdaq dropped 1.7%, reflecting broad technology weakness.

Semiconductor Sector Hit Hard:

Chip stocks led losses, with major players including Nvidia, Intel, Lam Research, Micron Technology, KLA Corporation, and Arm all trading lower. The Philadelphia Semiconductor Index plunged more than 19% from its late-June peak, reaching a nearly two-month low and heading toward its worst weekly performance since March 2025. Concerns centered on AI infrastructure spending rather than company-specific fundamentals. International semiconductor stocks also declined, with competitive pressure from Chinese startup Moonshot AI's new model narrowing the gap with U.S. offerings.

Netflix Plummets:

Netflix shares dropped over 11% after issuing third-quarter guidance below expectations, despite broadly in-line Q2 results, signaling an earnings-multiple reset risk for high-valuation tech stocks.

Geopolitical Tensions:

Escalating Middle East conflict drove oil prices higher, with WTI crude trading above $81 per barrel and Brent above $86. The U.S. military conducted its sixth consecutive evening of strikes against Iran, targeting military infrastructure. Iran retaliated with attacks on U.S. forces in Syria and Bahrain, with one strike hitting a Kuwaiti power plant. Disruptions to the Strait of Hormuz, which carries one-fifth of global oil supplies, continued.

Market Sentiment:

The CBOE Volatility Index climbed to a week-high, reflecting increased investor caution despite earlier positive signals from bank earnings and softer inflation data.