Nasdaq 100 futures experienced a significant decline on Friday, as increasing concerns regarding artificial intelligence expenditure negatively impacted market sentiment, leading to a downturn in global technology stocks. Futures for the Dow Jones Industrial Average declined by 335 points, representing a decrease of 0.6%.S&P 500 futures declined by 0.9%, whereas Nasdaq-100 futures experienced a more significant drop of 1.9%, reflecting increased scrutiny on technology stocks. Global chip stocks continued their downward trajectory on Friday, as U.S.-listed shares of semiconductor manufacturers and related firms experienced declines in pre-market trading. At 5:50 a.m., the iShares Semiconductor ETF experienced a decline of 3.7%, whereas the semiconductor ETF from VanEck recorded a decrease of 3.4%. Meanwhile, shares of Applied Materials and LAM Research both declined by approximately 5%. Intel and KLA Corporation experienced declines exceeding 4%, whereas Arm and Micron each recorded a 4% loss.

Nvidia shares experienced a decline of 3%. Those losses compounded the declines observed in the prior session, which were similarly driven by semiconductors. The SMH is down 6.9% for the week, indicating a trajectory towards its third weekly decline in four weeks. The major stock benchmarks are down week to date, with the S&P 500 declining by 0.6%, while the Dow and Nasdaq have decreased by 0.2% and 1.5%, respectively. A sell-off in Asia-Pacific markets intensified on Friday, as chipmakers continued to experience a downturn. Japan’s Nikkei 225 closed 4% lower, while Australia’s benchmark S&P/ASX 200 fell 0.5%. Mainland China’s CSI 300 concluded the trading session with a decline of 3.6%. South Korean markets were closed due to a public holiday.

The sell-off, spearheaded by semiconductor stocks and the wider technology sector, extended its reach to Europe on Friday. At 10:52 a.m. in London, Dutch semiconductor equipment makers ASMI and ASML experienced declines of 5.4% and 4.4%, respectively. STMicroelectronics shares declined by 7%, while Infineon experienced a decrease of 5.6%, and BE Semiconductor shares fell by 5.3%. In a note on Friday morning, strategists at BBH remarked that investors are “increasingly questioning the sustainability of the ongoing AI capital expenditure boom.” They said “The [Bank for International Settlements] annual economic report cautions that boom-bust cycles are a regular feature of past investment surges driven by transformative technologies.” Meanwhile, Barclays strategists seemed unfazed by the fluctuations in the technology sector in a note released on Friday.

“While Tech volatility may persist in the near term, we believe that the reset in positioning should ultimately prove healthy, creating more attractive entry points for long-term investors targeting the structural AI theme,” they said. Further escalations in the U.S.-Iran conflict also remained in focus on Friday. The U.S. Central Command reported that it has concluded its sixth consecutive evening of strikes against Iran, targeting numerous military installations, including logistics infrastructure and maritime capabilities. Iranian officials asserted on Friday that they have aimed at U.S. military forces in Syria and Bahrain, thereby expanding Tehran’s military actions across the Middle East. It occurs as the delicate ceasefire established last month has deteriorated, once more interrupting energy transportation through the strategically important Strait of Hormuz, which generally manages approximately 20% of global oil traffic.