Traders work on the floor of the New York Stock Exchange during morning trading on June 26, 2026 in New York City.
Michael M. Santiago | Getty Images
The Nasdaq Composite posted its fifth consecutive losing session Friday as investors rotated out of key technology stocks and into more defensive areas of the market.
The tech-heavy index dropped 0.24% to close at 25,297.62, while the S&P 500 ticked down 0.05% to 7,354.02. The Dow Jones Industrial Average shed 44.51 points, or 0.09%, to end at 51,876.11.
The S&P 500 slid nearly 2% on the week, while the Nasdaq fell 4.6% in the period. The Dow outperformed, rising 0.6% week to date.
Chip stocks were weaker after a New York Times report that OpenAI is considering delaying its IPO to next year because of SpaceX‘s poor performance following its debut and overall volatility in AI-related shares.
The report raised concerns about “sustainability of their infrastructure spending given the delay in funding from the capital markets,” wrote JPMorgan traders in a note.
The OpenAI IPO delay “could slow the pace of infrastructure spending,” said Adam Crisafulli of Vital Knowledge.
Shares of Micron Technology declined more than 6%, while Advanced Micro Devices lost 2%. Shares of Intel shed more than 3%.
The sell-off was particularly severe in Asia. SoftBank Group, which is a key backer of OpenAI, led losses across the region on Friday, plunging more than 12%. South Korean equities finished sharply lower, with the Kospi declining 5.81% to 8,411.21 and the Kosdaq shedding 4.10% to 851.37, as the broad-based technology sell-off swept across the region.
Ross Mayfield, investment strategist at Baird, believes that the rotation could last “well into July” because of, in part, “how extended” some of the chip stocks have gotten. That said, he’s still bullish on the group in the long term.
“I still over the next 12 months would bet on chip stocks and AI infrastructure stocks outperforming because the demand is just so insatiable,” he said. While there is “a little bit of catch up to be played by some of the laggards,” Mayfield continued, “I don’t necessarily think that this is a full-on rotation where AI infrastructure names are going to be laggards for the next 12 months or anything like that.”
The S&P 500 information technology sector dropped 1% on the day as investors moved out of chip stocks and continued to buy up shares of healthcare names after the group was a standout in the prior trading day. Shares of Eli Lilly were up 7%, while Johnson & Johnson gained almost 4%. AbbVie shares advanced more than 4%.
Beyond healthcare, the consumer staples, financials and utilities sectors were also winners of the day. Consumer staples advanced nearly 1%, while financials and utilities gained 0.8% and 0.4%, respectively.
Better-than-expected consumer sentiment data, along with an improved inflation outlook, lent support to the market Friday. That’s even as Minneapolis Federal Reserve President Neel Kashkari said he now expects that one interest rate hike will be necessary this year as a result of rising inflation linked to the conflict in the Middle East.
Oil prices settled lower Friday even after President Donald Trump said that Iran violated the ceasefire agreement with the U.S.
