NEW YORK (AP) — More sell-offs for computer chip companies and other winners of the artificial-intelligence technology boom are yanking stock markets lower Friday. Oil prices, meanwhile, continue to climb because of the war with Iran.

The S&P 500 dropped 0.8% and was on track to close out its first losing week in the last three and just its third since March. Just a couple days ago, it had climbed within 0.5% of its all-time high.

The Dow Jones Industrial Average was down 40 points, or 0.1%, as of 10 a.m. Eastern time, and the Nasdaq composite was 1.7% lower.

Chip stocks once again were at the center of the weakness. They’ve been under pressure for weeks on worries that their prices shot too high and that voracious demand for computer memory and processors may be unsustainable if AI ends up producing less profit and productivity than promised.

Nvidia was the heaviest weight on the S&P 500 after falling 2.8%, and Applied Materials sank 6.1% to trim its surge for the year so far below 105%.

The sell-off was worldwide, with indexes tumbling 6.5% in Taipei, 4% in Tokyo and 3% in Shanghai as stocks like Taiwan Semicondcutor Manufacturing Co. dropped 7.3%.

South Korea’s stock market was closed for a holiday, offering some respite, if only temporary. It’s been at the center of the AI swings because it’s dominated by two huge tech companies, Samsung Electronics and SK Hynix. This past week alone, Seoul’s Kospi stock index had one day where it surged 6.2% and two others where it sank 6.4% and 8.9%.

News of a Chinese open-sourced AI model by startup Moonshot, Kimi K3, further shook markets. Similar to when China’s DeepSeek announced its AI model in early 2025, another low-cost rival to big Western AI models like ChatGPT and OpenAI could potentially hurt demand for computer chips and other components.

Adding to the pressure on Wall Street Friday were drops for several stocks following their latest earnings reports. It’s a departure from much of the rest of the week, when companies like Goldman Sachs and BlackRock jumped after delivering better profits for the spring than analysts expected.

Netflix sank 9.4% after its revenue for the latest quarter fell just short of analysts’ expectations, even though its profit was bigger than expected. Its forecasts for upcoming revenue and profit in the summer also fell below expectations.

Intuitive Surgical, a maker of robotic surgical systems, dropped 11.1% despite topping expectations for the latest quarter. Analysts pointed to worries about slowing procedure growth because of the expiration of enhanced tax credits that helped lower the cost of health insurance for many Affordable Care Act enrollees.

Elon Musk’s SpaceX fell 3.6% and touched its lowest level since its stock began trading on the Nasdaq just over a month ago. The owner of the xAI business has gotten swept up in the swings of AI stocks. It also had to abort a test flight of its mega Starship rocket Thursday within a second or so from blasting off.

More climbs for oil prices also pressured the stock market.

The price for a barrel of Brent crude, the international standard, rose 3.1% to $86.87, up from roughly $76 a week ago.

Oil prices have been scraping their highest levels in a month because of worries that the war with Iran will keep oil tankers out of the Strait of Hormuz and block shipments of crude from the Persian Gulf to customers worldwide. The United States expanded its airstrike campaign against Iran early Friday by hitting more bridges and collapsing a tower at a key Iranian port.

High oil prices have sent Treasury yields higher in the bond market, which threatens to slow the economy and undercut prices for stocks and all kinds of other investments. Higher yields have already sent the average 30-year mortgage rate to its highest level in nearly a year.

But Treasury yields nevertheless eased Friday. The yield on the 10-year Treasury fell to 4.52% from 4.57% late Thursday.

A report suggested sentiment among U.S. consumers is improving more than economists expected. The preliminary reading from the University of Michigan’s survey hit its hihest reading since February, and expectations for upcoming inflation eased.

But much of the rise was due to recent drops for prices at gasoline pumps, according to Joanne Hsu, director of the sruvey. If gasoline prices rise again because of crude’s recent rally, the improvement could be under pressure.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed to this report.

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