LIVE MARKETS-AI pullback turns into broader risk-off move

Nearly every S&P 500 .SPX sector finished lower. Communication services .SPLRCL led the declines, falling more than 2%, while technology .SPLRCT and consumer discretionary .SPLRCD each lost more than 1%.

Energy .SPNY was the lone bright spot, rising more than 1%. The sector was lifted by a 4% jump in NYMEX crude futures CLc1, driven by renewed U.S.-Iran tensions and concerns about potential disruptions to Red Sea shipping routes.

Wall Street's selloff deepened on Friday as weakness in AI-linked stocks, which have powered much of this year's rally, spilled into the broader market.

Semiconductor shares, one of the market's key leadership groups in 2026, remained at the center of the decline. But what began as a chip-driven selloff broadened as the session wore on, dragging most sectors lower and signaling a wider shift toward risk aversion.

Both the S&P 500 Financials Index .SPSY and the S&P 500 Value Index .IVX hit record intraday highs earlier in the session but failed to hold those gains, ending the day in negative territory.

Chip stocks remained under pressure. The PHLX Semiconductor Index .SOX recovered from its session lows but still ended down 1.63% on the day and 20.23% below its June 22 record closing high, confirming it had entered bear-market territory. With a weekly decline of 10%, the index posted its steepest weekly drop since April 2025.

There were a few pockets of strength. The Nasdaq Biotechnology Index .NBI edged higher, while Apple AAPL.O closed at a record high after earlier surpassing Nvidia NVDA.O as the world's most valuable company.

Still, the major indexes all finished the week lower. The Dow Jones Industrial Average .DJI fell 0.9%, the S&P 500 .SPX lost 1.6%, and the Nasdaq Composite .IXIC dropped 2.9%, underscoring mounting pressure on the AI trade and the market's former leaders.