Global equity markets faced pressure on Friday, with technology stocks leading the decline as investors adopted a defensive posture ahead of the weekend, remaining vigilant over escalating hostilities in the Middle East.

Concurrently, the S&P 500 is poised to end a historic streak of weekly gains, driven by renewed weakness in the artificial intelligence trade and investor anticipation that non-farm payroll data will reinforce expectations of interest rates staying higher for longer.

As of the latest update, Dow Jones futures were up 0.17%, while S&P 500 futures fell 0.47%, having been largely flat for the week so far.

A decline on Friday would prevent the benchmark index from achieving a tenth consecutive weekly rise, which would have been its longest such streak since 1985.

Nasdaq 100 futures dropped 1.12%, following a rotation out of chip stocks during Thursday's session.

Among individual stocks, Lululemon Athletica (NASDAQ: LULU) fell more than 11% in after-hours trading after the company lowered its guidance for the coming year.

Micron Technology was also one of the major decliners among after-hours tech stocks, dropping nearly 5%.

The pan-European STOXX 600 index declined 0.2%, led lower by the technology sector.

The tech sector, which has surged 33% over the past two months, has been the best-performing group within the broader index.

Among major European indices, Germany's DAX fell 0.35%, the UK's FTSE 100 dropped 0.2%, and the Netherlands' AEX, which has a high weighting of tech stocks, declined 0.6%.

France's CAC 40 was flat, Spain's IBEX 35 gained 0.2%, and Italy's FTSE MIB fell 0.15%.

In Asian markets, the MSCI Asia Pacific ex-Japan index fell 2.23% during Asian trading hours.

South Korea's tech-heavy Kospi index plunged as much as 7%.

Japan's Nikkei 225 also declined, led lower by semiconductor-related stocks, falling 1.6% in early afternoon trading.

Chinese semiconductor stocks also retreated after gains earlier in the week.

Hong Kong's Hang Seng Index fell 1.1%, while the Shanghai Composite dropped 0.7%.

AI Trade Cools, Semiconductor Chain Faces Selling

Charu Chanana, Chief Investment Strategist at Saxo Bank, stated, "It looks pretty clearly like a risk-off mode today."

She said, "South Korea has been one of the biggest beneficiaries of the AI memory supercycle, so when Broadcom (NASDAQ: AVGO) disappointed on AI expectations, investors quickly reduced exposure across the entire semiconductor supply chain."

She added, "The issue is not that AI demand has disappeared, but that market expectations had become extremely high; even good data is not enough to support stock prices if guidance is not raised further."

Equities began to retreat after Broadcom's outlook for chip sales fell short of lofty market expectations.

This raised questions about whether the AI trade rally had become excessive, prompting investors to take profits following a sharp run-up in the sector.

Tomás García-Purriños, Senior Asset Allocation Strategist at Santander Asset Management, said, "Following a period of upward revisions to earnings expectations for the sector, investors are taking a more selective view of new information and guidance updates. We believe the recent weakness is primarily profit-taking and consolidation after a strong rally."

S&P 500 Inclusion Rules Unchanged, Unlisted AI Giants Must Wait

S&P Dow Jones Indices stated it will maintain the eligibility criteria for benchmark indices like the S&P 500, rejecting a proposal to allow large companies to be included faster after going public, further dampening market sentiment.

This decision means companies like SpaceX, Anthropic PBC, and OpenAI, once they go public, will still have to wait at least a year to be eligible for inclusion in the U.S. benchmark index.

Their stocks would only then potentially benefit from buying demand generated by passive index-tracking funds.

Ven Ram, a Bloomberg cross-asset strategist, said, "With SpaceX, Anthropic, and OpenAI still awaiting listings, Wall Street may maintain a 'higher for longer' bubble tone. But Broadcom's disappointing guidance could ultimately be the first inflection point for the AI narrative. Investors need to consider whether this brings us a step closer to a 'Minsky moment'—a sudden and dramatic collapse in asset values."

Middle East Situation Affects Oil Market, Strait of Hormuz Risk Remains

Investors are also monitoring progress in US-Iran peace talks.

Brent crude fell for a second consecutive day, trading around $94.70 per barrel.

Oil prices retreated slightly after Oman stated operations at the Mina al Fahal port were normal, following a Reuters report that oil loading had been suspended at the port after an explosion.

Kristian Kerr, Head of Macro Strategy at LPL Financial, said that even if Washington and Tehran reach a memorandum of understanding, the market is underestimating the complexity involved in restoring shipping through the Strait of Hormuz to pre-conflict levels.

He stated, "Any early increase in crude supply would likely come from oil that is already produced, including oil stranded or on floating vessels, and stored Iranian cargoes, rather than a sustained restart of production or exports. In other words, it's more about clearing existing bottlenecks than re-expanding the supply base."

Analysts at ING said, "The oil market is still trading on expectations of an imminent resumption of energy flows from the Persian Gulf. With inventories falling and as we approach the period of stronger demand in the third quarter, this means there remains significant upside risk for oil prices."

Bond and Currency Markets Await Jobs Data, Yen Nears 160 Level

U.S. Treasuries edged higher ahead of Friday's release of the May employment report, with the yield on the 10-year note falling 1 basis point to 4.46%.

The 30-year yield held steady at 4.977%.

In currency markets, the U.S. dollar is on track for a 0.5% weekly gain, supported by Middle East conflict.

The yen hovered near the 160 yen per dollar level, last up 0.1% at 159.95.

Traders remain alert to potential further intervention from Tokyo as Japanese officials escalate warnings against the weak yen.

Cryptocurrencies Plunge, Bitcoin Hits Four-Month Low

As a brutal week for cryptocurrencies neared its end, Bitcoin fell to a four-month low, Ether touched a one-year low, and Solana dropped to a two-and-a-half-year low.

Digital assets faced pressure from uncertainty related to the Iran war and outflows from cryptocurrency exchange-traded funds.

Bitcoin fell as low as $61,117, on track for a 15% weekly decline—its largest since the week of the FTX collapse in November 2022.

Ether fell to a low of $1,627, while Solana touched a low of $63.840.

Jensen Huang Revisits South Korea, Predicts Busier AI Infrastructure in Second Half

After flying from Taiwan to Seoul's Gimpo International Airport on Friday, NVIDIA (NASDAQ: NVDA) CEO Jensen Huang told media that his itinerary included meetings with Hyundai Motor, LG, SK Hynix, Samsung Electronics, and Naver.

The core purpose is to ensure supply chain partners "stay in sync and are fully prepared."

In a media interview, he explicitly stated that AI infrastructure construction is accelerating, with the scale in the second half of 2026 far exceeding that of the first half, and expecting even greater growth in 2027.

He described himself as bringing "massive business" to South Korea and hinted at another "surprise" yet to be announced, but declined to provide details.

On the market's most closely watched issue of memory supply, Huang dismissed rumors that NVIDIA was reducing the amount of high-bandwidth memory (HBM) in its systems due to tight supply, clearly stating the company would use "a lot of high-speed memory."

This statement is directly positive for key suppliers like Samsung Electronics and SK Hynix, which together handle approximately 70% of the memory supply for NVIDIA's AI chips.

Stocks in Focus

Dragged down by operational headwinds, Lululemon Athletica lowered its full-year profit and revenue guidance, causing its stock to plunge 13%.

According to LSEG data, the company's guidance for the current quarter for both profit and revenue also fell short of analyst consensus estimates.

DocuSign's earnings guidance failed to meet Wall Street expectations, sending the software stock down 4%.

Its Q2 revenue guidance range of $865 million to $869 million just straddled the analyst consensus estimate of $866 million.

Following Broadcom's disappointing earnings report that triggered a sector sell-off on Thursday, several chip stocks fell again on Friday.

Broadcom fell another 1% after plunging 12.5% the previous day.

Advanced Micro Devices fell nearly 3%, Intel dropped over 2.5%, and Arm Holdings slid 5%.

NVIDIA showed relative resilience, falling just 1%.

Thursday's chip sell-off spread to the memory segment, with the decline continuing in Friday's pre-market trading.

Micron Technology and Lam Research fell sharply by 3%, Seagate Technology dropped 2.5%, and Western Digital declined 1.5%.

Cooper Companies reported Q2 adjusted earnings per share of $1.21, beating the FactSet consensus estimate of $1.10.

Revenue of $1.08 billion also exceeded the expected $1.05 billion, with both metrics surpassing expectations, sending the stock up nearly 5%.

Guidewire Software plunged 14%.

According to StreetAccount data, the company's Q3 adjusted gross margin of 66.4% missed the market expectation of 67%.

However, both revenue and net income for the period exceeded market forecasts.

Chipotle Mexican Grill shares rose 1.5% after JPMorgan upgraded the stock from "Neutral" to "Overweight."

The investment bank stated that the company's strong Q1 same-store sales performance meant the stock's upside potential outweighed its downside risks.

Construction engineering firm Argan reported Q1 results that significantly exceeded expectations, with earnings per share of $3.24 and revenue of $291 million.

FactSet-compiled analyst estimates were $2.31 and $256 million respectively. Buoyed by the positive results, the stock surged 11%.

Software platform for contractors ServiceTitan raised its full-year guidance.

Its adjusted operating profit guidance was raised to $142 million - $147 million, up from the previous $128 million - $133 million and above the FactSet consensus estimate of $131.6 million, sending the stock soaring 16%.

Bitcoin fell another 2%, breaking below the $63,000 level, dragging down related publicly traded companies.

MicroStrategy, which had previously triggered selling pressure by slightly reducing its Bitcoin holdings, fell 2%.

Trading platforms Coinbase Global and Robinhood Markets both declined 1.5%.