Chip stocks tumble as markets close a losing week

Chip stocks tumbled as Wall Street closed out a losing week, with semiconductors leading a broad decline. Heading into the close, the S&P 500 fell around 1%, the Nasdaq dropped more than 1%, and the Dow slipped roughly 0,6%, with investors reassessing how far the AI rally could realistically extend. The Philadelphia semiconductor index traded well below its June record high before trimming some losses later in the day. Pressure continued for a third session after China’s startup Moonshot unveiled Kimi K3, which it described as the world’s largest open-weight AI system and claimed rivals from Anthropic and OpenAI. Over five sessions, Astera Labs, Marvell Technology, and Arm Holdings fell by double digits, while Micron and STMicroelectronics also posted double-digit weekly declines. Applied Materials, Lam Research, Intel, and KLA each dropped about 4% to 5% on Friday. The selloff spread internationally, including Japan’s SoftBank down more than 9%.