Nasdaq drops nearly 2% in the opening minutes; Dow holds near flat; Brent runs toward a 12% weekly gain as Hormuz transit collapses

Roughly 25 minutes into the session, the S&P 500 was trading at 7,466.06, down 67.71 points, or 0.90%. The Nasdaq Composite was off 1.88%, while the Dow Jones Industrial Average slipped just 0.14%. The Philadelphia Semiconductor Index dropped 4%  — a second consecutive session of heavy losses for the group after the index tumbled more than 4% on Thursday.

The split between the Dow and the Nasdaq is the story of the morning. Money is not leaving the market so much as leaving one corner of it.

What’s driving it

Two separate pressure points hit at once.

The first is a continued repricing of AI infrastructure spending. The rally that carried markets off their March lows has stalled as investors reassess how much companies are committing to artificial intelligence and what those commitments return.  Thursday offered a clean illustration: Taiwan Semiconductor Manufacturing reported a 77% annual earnings gain and watched its shares fall more than 4%  — the second time in three days that strong results from a dominant chipmaker preceded a selloff in the sector rather than a rally.

The pressure traveled overnight. Japan’s Nikkei 225 closed down 4.03%.

The second is Netflix. The company reported second-quarter earnings of $0.80 per share against a $0.79 estimate on revenue of $12.6 billion, essentially in line. The problem was the guide: third-quarter revenue of $12.86 billion versus a $13.006 billion consensus, and earnings of $0.82 against $0.84 expected. Full-year 2026 revenue was narrowed to $51 billion to $51.4 billion.  Shares fell more than 9% in extended trading  — a second straight quarter of decelerating sales growth in what management characterized as a competitive and shifting entertainment market.

Market Movers

• Netflix (NFLX) — down sharply on the Q3 revenue and earnings guide, not the quarter itself.

• Semiconductors — the sector is doing the bulk of the index-level damage. The PHLX Semiconductor Index is down 4% at the open after a 4%-plus decline Thursday, with the group at roughly two-month lows.

• Truist Financial (TFC) and Fifth Third Bancorp (FITB) — the regional banks close out this week’s earnings docket,  giving the first read on mid-sized lender credit quality since energy costs began climbing again.

• Defensive names — consumer staples are holding up as the rotation out of high-multiple tech continues.

Commodities

Energy is where the geopolitical backdrop is showing up in hard numbers.

Brent crude traded at $85.10 a barrel and WTI at $79.93 Friday morning, with prices up roughly 12% on the week — on pace for the strongest weekly gain since April. The move traces directly to the Strait of Hormuz, where confirmed crude and condensate transit has fallen 62% to 4.1 million barrels per day, according to Kpler, with regional loadings down 47%.

The U.S. struck Iranian coastal, military and maritime targets for a sixth consecutive night. Five bridges were hit and seven people were killed. Iran launched fresh strikes in response.  Friday’s exchange included the first direct attack on U.S. facilities in Syria.

The date that matters for planners: the 60-day ceasefire memorandum signed last month expires August 16.

Elsewhere, gold traded near $4,000 an ounce, up modestly, and the VIX rose nearly 10% to 18.37.  Bitcoin was near $62,932, down 1.7%.

On deck

The University of Michigan’s preliminary July consumer sentiment reading lands at 10 a.m. ET. It arrives with unusual weight. June’s final reading came in at 49.5, up from May’s all-time low of 44.8, with the improvement credited largely to a moderation in gasoline prices. Year-ahead inflation expectations sat at 4.6% — well above the 3.4% recorded in February, before the Iran conflict began.

That relief has now reversed. Gasoline is following crude back up, which means the single input that lifted sentiment off record lows in June has flipped direction going into the July survey.

For business owners, the read-through is straightforward: the equity story this morning is a tech-sector valuation argument, and it is largely self-contained. The energy story is not. A 62% collapse in Hormuz transit shows up in freight rates, fuel surcharges, and input costs for anyone moving physical goods — and it will show up on invoices long after the chip trade sorts itself out.

Note on data: June retail sales grew 0.2% month over month, below the 0.3% consensus.  EIA’s July outlook, published July 7, forecast Brent averaging $74 a barrel in the third quarter  — a projection built on the assumption of a reopened strait, and one this week’s transit data has already overtaken.

JBizNews Desk | Wall Street

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