WS #12275

Markets opened sharply lower on Friday, July 17, as a deepening tech rout intensified, driven by a semiconductor sell-off and disappointing Netflix guidance. The iShares Semiconductor ETF (SOXX) entered bear market territory, down over 19% from its June peak, as concerns over AI spending sustainability resurfaced. Netflix (NFLX) shares slumped pre-market after its earnings forecast disappointed, while Intuitive Surgical (ISRG) fell despite a Q2 beat due to US procedure growth concerns. Apple (AAPL) briefly surpassed Nvidia (NVDA) to become the world's most valuable company, but the broader tech weakness persisted. Geopolitical risks escalated with Ukraine striking Russian tankers and a refinery, and the Strait of Hormuz traffic remaining at just 17% of normal, keeping oil prices elevated (WTI +3.2%, Brent +3.0%). US economic data showed industrial production (+0.1% MoM) missing estimates, while import prices unexpectedly rose 0.3% MoM, with costs from China hitting the highest since 2008, signaling persistent inflation. The tech selloff is the dominant theme, with the narrative arc ESCALATING as the semiconductor rout deepens and AI capex concerns widen. Counter-signals include Apple's market cap milestone and strong earnings from Abbott (ABT) and UnitedHealth (UNH), but these are insufficient to offset the broader risk-off sentiment.