Closing Bell: AI Selloff Deepens as Chip Stocks Slide and Volatility Surges

U.S. stocks fell sharply Friday as selling in artificial-intelligence and semiconductor shares intensified, with investors increasingly questioning the debt-heavy financing behind the AI infrastructure boom as rising oil prices added another source of pressure.

The S&P 500 (SPX) fell 1.09%, the tech-heavy Nasdaq-100 (/NDX) dropped 2.5% and the Dow Jones Industrial Average ($DJI) declined 0.35%. The Russell 2000 (RUT) lost 1.66%.

Semiconductors remained at the center of the selloff, with the PHLX Semiconductor Sector Index (SOX) dropping 3.83%. The CBOE Volatility Index (VIX) surged nearly 21% to the closely-watched 20 level. The 10-year Treasury yield held near 5.10%, while the U.S. Dollar Index ($DXY) slipped 0.25% to 101.787. WTI crude climbed 2.6% to about $99 per barrel, helping the S&P 500 energy sector outperform as technology remained under heavy pressure.

It's been a rough week for the AI trade. Selling first picked up after reports that China's ChangXin Memory Technologies had made advances in memory-chip technology. That raised competitive concerns for global producers and helped drive steep weekly declines in shares of Micron (MU), Samsung Electronics and SK Hynix (SKHY).

Attention then turned to how the AI buildout is being financed, especially among so-called neocloud providers that lean heavily on outside capital and debt to fund GPU-intensive infrastructure. Both stocks and bonds sold off on growing concern that aggressive spending plans could become harder to sustain if borrowing costs stay high or if AI revenue growth doesn't keep up with investment.

Three things to watch from Friday’s market:

CoreWeave Extends Rout as Debt Concerns Intensify

CoreWeave (CRWV) fell nearly 12%, bringing its weekly decline to more than 25%, as investors scrutinized its heavy debt load and the broader funding model behind neocloud expansion. Weakness in CoreWeave bonds added to concerns that rising financing costs could pressure balance sheets across the group. See The Big 3: CRWV, APPL, TEAM | Trading 360

Tesla Falls Despite Dramatic Roadster Reveal

Tesla (TSLA) were down 2% after it unveiled its next-generation Roadster at a SpaceX facility. The prototype used SpaceX-derived compressed-air thrusters for limited flight and showed a claimed 0-to-60 mph time of 0.81 seconds. Still, the presentation couldn't offset broader weakness in high-growth tech shares. See TSLA Roadster Demo Shows Off Tech Spectacle, Question Marks on Outlook Linger

Apple's Foldable iPhone Sells Out

Apple (AAPL) sold its initial pre-order supply of $1,999 iPhone Duos within minutes on Friday. The strong demand is an early sign of consumer interest in Apple's first foldable smartphone. Apple shares rose 0.43% on Friday and gained 2% on the week. See Blanchard: "No Reluctance" in iPhone Duo Preorders, Siri AI Will Lead Future Growth

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