U.S. Stock Futures Fall as Chip Sector Selloff Intensifies, Netflix Plunges on Weak Forecast

U.S. stock futures pointed to a sharply lower open on Friday, dragged down by a deepening selloff in semiconductor stocks and a significant drop in Netflix shares following a weak corporate forecast. The downturn signals growing investor concern over the sustainability of this year's artificial intelligence-driven market rally.

Tech Stocks Lead Market Decline

The technology sector was poised to lead the market lower, with futures on the tech-heavy Nasdaq 100 indicating the steepest losses. The negative sentiment followed a weak forecast from streaming giant Netflix, which saw its shares tumble 9.4% in premarket trading after it projected third-quarter revenue and earnings below Wall Street expectations.

According to a report from Reuters citing market data at 4:55 a.m. ET:

• Dow E-minis were down 352 points (0.67%).
• S&P 500 E-minis fell 78.25 points (1.03%).
• Nasdaq 100 E-minis slid 598.25 points (2.05%).

Semiconductor Sector Under Pressure

Ad

The selloff in chip stocks, which began in the previous session, gathered pace as investors reassessed the high valuations in the AI sector. The Philadelphia SE Semiconductor index hit a nearly two-month low on Thursday and was on track for its worst weekly performance since March 2025.

Memory-chip makers were among the hardest hit in premarket activity. Shares of Micron Technology, Western Digital, and Seagate Technology were all down between 4.6% and 6.5%, extending a two-day slide for some of the year's biggest market winners.

Volatility Rises Amid Broad Concerns

The broader market anxiety was reflected in the CBOE Volatility Index (VIX), Wall Street's main fear gauge, which rose 1.8 points to 18.53, a more-than-one-week high. Even companies with strong results were not spared, as shares of medical device maker Intuitive Surgical fell 10.8% despite beating second-quarter profit and revenue estimates.

Investors were also monitoring geopolitical developments, including renewed military tensions between the U.S. and Iran in the Gulf, which added to the cautious tone. The broad-based selling puts the major indexes on track for weekly declines, reversing gains from earlier in the week that were driven by positive bank earnings and favorable inflation data.