Nasdaq falls 0.6% as chip selloff offsets Apple's boost to Dow

The Dow climbed to a fresh record as Apple rallied, but the Nasdaq slipped as Intel's post-earnings reversal deepened a semiconductor selloff that has weighed on the tech-heavy index.

The Nasdaq Composite fell 157 points, or 0.63 percent, to 24,980 on Friday as chip stocks sold off after Intel's reversal, while the Dow Jones Industrial Average climbed 236 points, or 0.46 percent, to a record 51,947 as Apple rallied. The S&P 500 ended nearly flat at 7,413, up less than 4 points.

"People are thinking, how do we make sense of all this spending, and how much more patient do we have to be before we actually see it translate to actual profits?" Peter Andersen, chief executive officer at Andersen Capital Management, said. "The fear of missing out is becoming more like a fear of massive overbuilding."

The Philadelphia Semiconductor Index fell, with Intel sliding after the chipmaker forecast quarterly profit and revenue above Wall Street estimates but outlined plans to increase spending over the next two years. Real estate was the best-performing S&P 500 sector, led by Digital Realty Trust after it raised its full-year forecast for funds from operations. Energy stocks gained as SLB climbed following a second-quarter profit beat, while technology was the biggest laggard.

The divergence between the Dow and the Nasdaq sets up a critical week ahead, with earnings due from Microsoft, Amazon, Meta and Apple. Investors are grappling with whether massive capital spending on artificial intelligence will translate into returns, a question that Alphabet's plan to hike spending even as it burns cash has brought into sharp focus. The Nasdaq's test of support near 24,980 comes as the 10-year U.S. Treasury yield holds near 4.63 percent, its highest since February, pressuring growth stocks.

Intel's shares sank Friday even after the company delivered a quarterly forecast that topped estimates. The chipmaker said it would increase spending over the next two years, adding to investor concerns about the cost of AI infrastructure buildout. The Philadelphia Semiconductor Index's decline extended a week of losses for the sector, which had led the market's rally earlier this year.

Apple's gain pushed the Dow to its latest record, providing a counterweight to tech weakness. The iPhone maker has benefited from a rotation into large-cap defensive growth names as uncertainty around AI spending and trade policy has increased.

Crude oil futures fell more than 3 percent Friday as traders booked profits from a five-session rally, while sources said China was pushing to resume stalled U.S.-Iran peace talks. The decline in oil provided some relief to equities, though the 10-year Treasury yield's rise to 4.63 percent has kept pressure on rate-sensitive growth stocks. U.S. services sector activity accelerated in July, data showed, while manufacturing growth slowed to its weakest pace since March.

The Nasdaq's break below 25,000 has traders watching for further downside. The next support cluster sits near 24,800, and a sustained move below that level could signal a deeper correction. A rebound would depend on next week's megacap earnings delivering the catalyst that growth stocks need.

This article is for informational purposes only and does not constitute investment advice.