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CHIP ROUT DEEPENS, NASDAQ SLIDES

Wall Street's main indexes are declining early Friday, though already well off their worst levels, as investors continue to rethink this year's AI-driven rally. A sharp selloff in chip stocks is weighing heavily on sentiment, while a disappointing forecast from Netflix NFLX.O is adding to the cautious tone.

The Nasdaq Composite .IXIC is taking the biggest hit, down around 1.3%. The S&P 500 .SPX is down around 0.54%, while the Dow .DJI is roughly flat.

Most sectors within the S&P 500 .SPX are actually in positive territory. Communication services .SPLRCL, down more than 2%, and technology .SPLRCT, off more than 1%, are leading the declines.

Not everything is lower, though. Energy .SPNY and utilities .SPLRCU, each rising more than 1%, are among groups bucking the trend as investors gravitate toward more defensive areas of the market.

The Nasdaq Biotech Index .NBI is gaining nearly 1%.

Additionally, the S&P 500 Value Index .IVX and S&P 500 Equal Weighted Index .SPXEW are on pace for record closing highs.

Beneath the surface, chip stocks remain at the center of the storm. The PHLX Semiconductor Index .SOX is down more than 1%, and flirting with bear-market territory. The index is now down about 20% from its June 22 record close.

Unless stocks can mount a turnaround later in the session, all three major U.S. indexes are on track to finish the week in the red.

Here is a snapshot of where markets stood around 10:05 a.m. ET.

(Terence Gabriel)

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