US equities ended Friday’s session mixed, with renewed selling across semiconductor stocks dragging the S&P 500 and Nasdaq lower. The S&P 500 declined 0.4%, while the Nasdaq fell 1.2%. The Dow Jones Industrial Average bucked the broader weakness, edging up 51 points.

Chipmakers remained under pressure amid renewed concerns surrounding Nvidia, regulatory scrutiny and uncertainty across the artificial intelligence trade. Investors also appeared reluctant to buy the dip ahead of Nvidia’s earnings next week, while fresh US Producer Price Index (PPI) data pointed to rising factory costs linked to higher energy prices.

Despite Friday’s losses, the major indices retained positive weekly performance, suggesting that the latest technology-sector selloff has not erased the broader gains recorded over the week.

US Stock Market Snapshot

Weekly performance

Current Market Performance: Technology Selloff Weighs on Wall Street

The Nasdaq recorded the steepest decline among the major US indices on Friday as semiconductor stocks came under renewed selling pressure.

The S&P 500 also finished lower, reflecting the wider impact of weakness across major technology companies. The Dow managed a modest gain of 51 points, demonstrating greater resilience than the technology-heavy indices.

The renewed pressure on chipmakers has been linked to concerns surrounding Nvidia, including reports of heightened regulatory scrutiny and questions over whether US export restrictions were circumvented in sales to Chinese companies.

Investors also remained cautious ahead of Nvidia’s earnings announcement next week, with uncertainty surrounding the AI trade limiting appetite for buying technology stocks during the decline.

Nvidia Crisis: Semiconductor Stocks Face Renewed Selling

Nvidia fell 2% on Friday as concerns surrounding the company continued to weigh on sentiment across the semiconductor sector.

The company faces heightened regulatory scrutiny, including probes into whether US export restrictions were circumvented through sales to Chinese companies. The market update also cited CEO Jensen Huang’s reported resignation amid allegations involving a suspected Chinese spy.

The developments have added another layer of uncertainty to an already sensitive technology sector, where investor expectations surrounding artificial intelligence have supported substantial market interest.

The wider semiconductor selloff was reflected in several major stocks:

• AMD: Fell 8.7%, recording the largest decline among the listed chipmakers.
• Broadcom: Dropped 4.9%.
• Micron: Declined 2.5%.
• Nvidia: Lost 2%.

The weakness highlights how concerns surrounding one of the sector’s most influential companies can affect sentiment across the wider semiconductor industry.

Technology Stocks: Cisco and Applied Materials Also Decline

Selling pressure extended beyond the major chipmakers.

Cisco shares dropped 6.2% despite the company raising its FY2027 guidance. The decline suggests that stronger forward guidance was insufficient to offset broader weakness in technology-sector sentiment.

Applied Materials also finished lower, falling 2.8% despite reporting record revenues.

The performance of both companies highlights the cautious approach investors are taking towards technology stocks amid renewed volatility and uncertainty surrounding the AI investment outlook.

Inflation and Federal Reserve Outlook: Higher Energy Costs Raise Concerns

Fresh US Producer Price Index data indicated that higher energy prices were increasing factory costs across core sectors.

The latest figures reinforced concerns about inflationary pressures and strengthened market expectations for multiple Federal Reserve interest-rate increases during this cycle.

Higher interest-rate expectations can create additional pressure for equity valuations, particularly in technology and growth stocks, where future earnings expectations play an important role in pricing.

Investors will therefore be monitoring upcoming inflation data and Federal Reserve signals for further evidence of whether borrowing costs could remain higher than previously anticipated.

Bullish Sentiment

1. Positive weekly performance: Despite Friday’s declines, the S&P 500 gained 1.4% over the week, while the Nasdaq 100 advanced 2.1%.
2. Dow resilience: The Dow Jones Industrial Average added 51 points on Friday and gained 472 points for the week.
3. Record Applied Materials revenues: Applied Materials reported record revenues, providing a positive company-specific result despite its share-price decline.
4. Higher Cisco guidance: Cisco raised its FY2027 guidance, indicating a stronger forward outlook despite the 6.2% fall in its shares.

Bearish Sentiment

1. Renewed semiconductor selloff: Major chipmakers recorded significant declines, with AMD falling 8.7% and Broadcom losing 4.9%.
2. Nvidia regulatory uncertainty: Scrutiny surrounding potential circumvention of US export restrictions has increased uncertainty around Nvidia.
3. AI investment caution: Investors remained reluctant to buy technology stocks ahead of Nvidia’s earnings next week.
4. Higher inflation concerns: Rising factory costs linked to energy prices reinforced expectations of multiple Fed rate hikes.
5. Nasdaq weakness: The Nasdaq declined 1.2%, reflecting the impact of technology-sector selling.

US Stock Market Outlook: What Investors Are Watching

Nvidia’s upcoming earnings will be a major focus for investors in the coming sessions. Given the company’s influence across the semiconductor industry and the wider AI investment theme, its results and forward guidance could have significant implications for technology-sector sentiment.

Investors will also be watching developments surrounding regulatory scrutiny and US export restrictions, particularly where these could affect semiconductor sales to Chinese companies.

The inflation outlook will remain another important consideration. Higher factory costs and expectations of multiple Federal Reserve rate increases could weigh on equity valuations if inflationary pressures persist.

The market will therefore be balancing the positive weekly performance of the major indices against renewed weakness in technology stocks and growing uncertainty surrounding monetary policy.

Market Outlook for the Coming Sessions

Wall Street enters the next trading sessions facing a more cautious technology-sector outlook after Friday’s renewed semiconductor selloff.

The S&P 500 and Nasdaq ended lower, while the Dow managed a modest advance. However, the positive weekly performance across all three major indices indicates that the broader market has retained some underlying resilience.

Nvidia’s earnings next week represent the immediate catalyst for investors, with particular attention likely to focus on demand expectations, forward guidance and the implications of regulatory scrutiny.

At the same time, inflation developments and Federal Reserve rate expectations could influence broader market direction.

For now, the technology sector remains vulnerable to further volatility, while the wider US equity market will be looking for evidence that the latest semiconductor weakness does not develop into a broader correction.

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Disclaimer: This article is provided for informational and educational purposes only. It does not constitute investment advice, financial advice or a recommendation to buy or sell any financial instrument. Stock markets involve risk, and share prices can be volatile. Traders and investors should conduct their own research and consider their financial circumstances before making investment decisions.