U.S. stock indexes fell on Friday, with the S&P 500 down 1.01%, the Nasdaq-100 dropping 1.49%, and the Dow Jones Industrial Average declining 0.77%. The declines followed Netflix's mixed second-quarter earnings report released after market close on Thursday, which showed revenue of $12.56 billion slightly below estimates and lowered third-quarter guidance. Chipmakers remained under pressure after Taiwan Semiconductor announced earlier in the week a capital expenditure hike to $60-64 billion for 2026, up from $52-56 billion. Healthcare stocks and select earnings winners including GE Aerospace provided partial support to the broader market. The tech-heavy Nasdaq led losses as investors digested Netflix's cautious forward outlook and reduced engagement data reporting plans starting in 2027.
The Russell 2000, which tracks stocks with small market capitalizations, fell 0.42%. Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) fell 0.99%, Invesco QQQ Trust (QQQ) ended Friday around 1.50% lower, and the SPDR Dow Jones Industrial Average ETF Trust (DIA) lost 0.74%. The VanEck Semiconductor ETF (SMH) lost 2.18%, while the Vanguard Information Technology ETF (VGT) slipped about 1%.
Netflix Reports Mixed Q2 Earnings and Lowers Q3 Guidance
Netflix reported second-quarter results with revenue of $12.56 billion, slightly below estimates, and earnings per share of $0.80, which beat expectations. The company lowered third-quarter guidance and narrowed its full-year 2026 revenue outlook after market close on Thursday. Netflix announced it would reduce the frequency of its viewing-hours and engagement data releases starting in 2027. Shares fell more than 7% after the bell on Thursday and continued to weigh on sentiment Friday, dropping approximately 7% during Friday's session.
Taiwan Semiconductor Capex Hike Pressures Chip Stocks
Semiconductor stocks came under renewed pressure as investors continued to digest Taiwan Semiconductor Manufacturing's higher 2026 capital expenditure guidance of $60-64 billion, up from $52-56 billion, announced earlier in the week. Memory and related names, including Micron and Advanced Micro Devices, posted losses. Nvidia and Broadcom fell in sympathy with the broader chip sector weakness.
GE Aerospace, META Platforms, and Apple Drive Individual Stock Moves
GE Aerospace reported solid second-quarter results before the open on Friday, with aerospace demand remaining robust, adding to positive sentiment in industrials. META Platforms stock fell as much as 6% intraday but pared gains following a report by The New York Times that the company is in early talks to lease computing power from its AI data centers to Anthropic in a potential deal worth up to $10 billion over two years.
Apple overtook Nvidia as the most valuable company in the world in morning trade on Friday, reaching a market capitalization of $4.88 trillion. Bloomberg reported that Apple and the U.S. Justice Department are in early discussions to settle a 2024 lawsuit alleging that the iPhone maker violated antitrust laws. SpaceX is reportedly in talks with the Pentagon to supply billions of dollars' worth of data-center capacity for running AI models, according to people familiar with the matter who spoke to The Wall Street Journal.
Oil prices surged, with crude prices up 4.4%, on Middle East escalation fears and U.S.-Iran tensions.
FAQ
Why did Netflix's earnings report cause U.S. stocks to fall on Friday?
Netflix reported second-quarter revenue of $12.56 billion, slightly below estimates, and lowered third-quarter guidance after market close on Thursday. The company also narrowed its full-year 2026 revenue outlook and announced it would reduce the frequency of its engagement data releases starting in 2027, raising concerns about growth momentum and subscriber trends.
What caused semiconductor stocks to remain under pressure on Friday?
Chipmakers remained under pressure after Taiwan Semiconductor Manufacturing announced earlier in the week a capital expenditure hike to $60-64 billion for 2026, up from $52-56 billion. This guidance increase continued to weigh on the sector despite strong underlying demand.
What milestone did Apple reach on Friday?
Apple overtook Nvidia as the most valuable company in the world in morning trade on Friday, reaching a market capitalization of $4.88 trillion.
