US stock futures fell sharply on Friday as the retreat from artificial-intelligence winners gathered momentum and Netflix’s cautious outlook added another fault line to a stretched market.
Nasdaq 100 contracts dropped about 2%, while S&P 500 and Dow futures also weakened before the opening bell.
Memory-chip shares led the decline, extending a sell-off that has pushed the Philadelphia Semiconductor Index towards its worst week since March 2025.
The move suggests investors are no longer rewarding growth alone after a record-setting rally.
Rising volatility, renewed US-Iran fighting and fresh US-China tension added to the pressure across global markets before Friday’s session.
5 things to know before Wall Street opens
1. Memory-chip selling gathers force
SanDisk, Western Digital, Seagate and Micron fell between 4.6% and 6.5% in premarket trading, extending a second day of heavy losses.
The Philadelphia Semiconductor Index had already dropped 4.3% on Thursday and reached a near two-month low.
The reversal follows a record first-half run, suggesting investors are questioning whether AI infrastructure spending can keep accelerating fast enough to justify valuations.
2. Netflix guidance breaks the earnings spell
Netflix slid 9.4% after forecasting third-quarter revenue of $12.86 billion and diluted earnings of 82 cents a share, below Wall Street estimates of about $13 billion and 84 cents.
Second-quarter revenue rose 13% to $12.56 billion and operating income reached $4.19 billion, but the market focused on slowing growth and a narrower full-year sales outlook.
3. Futures signal a broad risk-off open
Dow futures fell 0.67%, S&P 500 contracts lost 1.03% and Nasdaq 100 futures dropped 2.05% by 4:55 am in New York.
The VIX rose to 18.53, its highest in more than a week.
Intuitive Surgical sank about 11% despite beating quarterly estimates, another sign that investors are demanding stronger guidance rather than rewarding backward-looking results.
4. US-Iran fighting keeps oil risk elevated
Iran said it launched fresh attacks on US facilities in the Gulf after a sixth consecutive night of American strikes.
Brent and US crude were heading for weekly gains of more than 11% as reduced traffic through the Strait of Hormuz kept supply concerns alive. Higher energy costs could also complicate the recent improvement in US inflation.
5. Trump’s China claims threaten a fragile truce
President Donald Trump accused China of interfering in US elections, allegations Beijing rejected as groundless.
He announced no new trade measures, but the rhetoric risks unsettling a diplomatic thaw before President Xi Jinping’s expected Washington visit in September.
For markets already retreating from crowded technology trades, another source of policy uncertainty is poorly timed.
