July 17 (Reuters) – U.S. stock index futures slid on Friday as a selloff in chip stocks deepened, forcing investors to reassess the staying power of this year’s AI-fueled rally, while a weak forecast from Netflix added 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.
Chip stocks were broadly lower, extending the previous session’s losses. Memory-chip makers, among the year’s biggest winners, fell sharply for a second straight day in premarket trading, with SanDisk, Western Digital, Seagate Technology and Micron Technology down between 4.6% and 6.5%.
The Philadelphia SE Semiconductor index hit a nearly two-month-low on Thursday and was set for its worst week since March 2025.
Netflix also weighed on sentiment after the streaming giant forecast third-quarter revenue and earnings below Wall Street expectations. Its shares fell 9.4%.
The renewed bout of volatility drove the CBOE Volatility Index, Wall Street’s fear gauge, to a more-than-one-week high, rising 1.8 points to 18.53.
At 4:55 a.m. ET, Dow E-minis were down 352 points, or 0.67%, and S&P 500 E-minis were down 78.25 points, or 1.03%. Nasdaq 100 E-minis were down 598.25 points, or 2.05%.
Thursday’s session had already set a weaker tone, with losses in chipmakers dragging the broader market lower. The main indexes were also on track for weekly declines, despite an initially upbeat start to the second-quarter earnings season from major banks and benign inflation data earlier in the week.
Geopolitical risks also loomed large. Iran said on Friday it had launched fresh attacks on U.S. facilities in the Gulf after a sixth straight night of U.S. strikes on Iranian military targets.
The escalation followed the breakdown of a brittle ceasefire reached last month and renewed concerns over energy flows through the Strait of Hormuz.
Meanwhile, U.S. 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 summit in Washington.
Among other premarket movers, Intuitive Surgical fell 10.8%, even after the medical device maker topped Wall Street estimates for second-quarter profit and revenue on strong demand for its surgical systems.
(Reporting by Ragini Mathur in Bengaluru; Editing by Joyjeet Das)
