Chip stocks were broadly weaker, extending the previous session's losses, with heavyweight Nvidia NVDA.O down 2.5% in premarket trading.
Applied Materials AMAT.O and Lam Research LRCX.O led losses in the sector, falling about 4% each. The iShares Semiconductor ETF SOXX.O declined 3%.
The Philadelphia SE Semiconductor index .SOX hit a nearly two-month low on Thursday and was set for its worst week since March 2025. The gauge has shed more than 19% from its late June record.
Strong results from TSMC TSM.N, the world's top advanced AI chipmaker, and ASML ASML.O, the leading supplier of high-end chipmaking equipment, did little to ease concerns over the durability of the chip-stock rally.
"This is morphing from just a chip selloff into something far broader. That is particularly obvious in indices like the Nasdaq, which has come so far, so fast in such a short space of time," said Chris Beauchamp, chief market analyst at IG.
"People will understandably be looking to hold on to the gains they might have made since the end of March."
The tech-heavy Nasdaq .IXIC has risen about 11% so far this year.
U.S. stocks set for a lower open
Wall Street's main indexes were set to open lower on Friday, with a reassessment of this year's AI-fueled rally by investors deepening a selloff in chip stocks and a weak forecast from Netflix adding to the pressure.
After a blistering run that lifted Wall Street's main indexes to record highs, investors have started to retreat from crowded semiconductor trades as worries over the scale of AI-related spending resurfaced.
Netflix and other premarket movers
Netflix NFLX.O weighed on sentiment after forecasting third-quarter revenue and earnings below Wall Street estimates. Shares of the streaming giant were down 11.3% before the bell.
The CBOE Volatility Index .VIX, Wall Street's fear gauge, rose 1.36 points to 18.09 — the highest in more than a week.
At 8:33 a.m. ET, Dow E-minis YMcv1 were down 342 points, or 0.65%, and S&P 500 E-minis EScv1 were down 68.5 points, or 0.9%. Nasdaq 100 E-minis NQcv1 were down 554 points, or 1.9%.
Among other premarket movers, Intuitive Surgical shares slid nearly 10% after the medical device maker kept its da Vinci procedure-growth forecast unchanged and warned insurance-plan changes may be delaying patient care.
Economic data and geopolitical risks
Thursday's chip-led losses already set a weaker tone, leaving the main indexes on track for weekly declines despite an upbeat start to second-quarter earnings from major banks and benign inflation data earlier this week.
Investors will also watch the University of Michigan's consumer sentiment survey and industrial production data, due later in the day, which cap a busy week of economic reports.
Geopolitical risks also loomed large. The United States struck bridges and an airport in Iran and Tehran responded by hitting a power and desalination plant in Kuwait.
Meanwhile, President Donald Trump's fresh accusations that China meddled in U.S. elections risked complicating a fragile truce with Chinese leader Xi Jinping, just two months before a planned Washington summit.
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