Chip stocks drag Nasdaq Composite to fifth straight losing session on Friday

The Nasdaq Composite extended its losing streak to five consecutive sessions on Friday as investors rotated out of major technology stocks and shifted toward defensive sectors.

The tech-heavy index slipped 0.24%, closing at 25,297.62, while the S&P 500 edged down 0.05% to 7,354.02. The Dow Jones Industrial Average also declined slightly, losing 44.51 points (0.09%) to finish at 51,876.11.

For the week, the S&P 500 fell nearly 2%, while the Nasdaq dropped 4.6%. In contrast, the Dow outperformed, gaining 0.6%.

Semiconductor stocks came under pressure following reports that OpenAI may delay its IPO until next year, raising concerns over AI infrastructure spending and funding sustainability. The news weighed heavily on chipmakers, with Micron falling more than 6%, AMD down 2%, and Intel losing over 3%.

The weakness spread globally, hitting Asian markets hard. SoftBank Group, a major OpenAI backer, plunged more than 12%, while South Korean markets saw sharp losses as the tech sell-off intensified across the region.

Meanwhile, defensive sectors attracted buying interest. Healthcare led gains, with Eli Lilly surging 7%, Johnson & Johnson rising nearly 4%, and AbbVie gaining more than 4%. Consumer staples, financials, and utilities also finished higher.

Despite stronger-than-expected consumer sentiment data and improving inflation expectations, markets remained cautious after Minneapolis Fed President Neel Kashkari signaled that another rate hike this year may be needed due to inflation concerns linked to Middle East tensions.

Oil prices closed lower on Friday despite renewed geopolitical concerns.