The Dow Jones Industrial Average slid 187.92 points, or 0.36%, to 51,732.70 in Friday afternoon trading, retreating from the all-time highs it touched earlier in the week as investors grew more cautious about how much they are willing to pay for shares tied to artificial intelligence. The pullback split the technology sector cleanly in two. The biggest consumer-facing tech names sold off while memory-chip producers surged on the back of Micron’s blockbuster quarterly results the day before.
Apple’s 6.1% drop led the megacap losses. The same memory crunch that punished consumer hardware lifted the chipmakers whose DRAM and high-bandwidth products sit at the bottleneck of the AI buildout.
The Dow Slips After Its Own Record
The Dow had set an intraday record on Thursday, eclipsing the prior peak set on June 16. That push higher came from healthcare, financial and industrial names rather than the megacap technology stocks that have led the market for most of the year. The rotation into non-tech sectors had propped up the broader tape even as the biggest names in software and consumer hardware wobbled.
Friday’s session showed what happens when that offsetting strength fades. The same forces that lifted industrials and healthcare on Thursday could not keep the index green once megacap tech accelerated to the downside. With the Magnificent Seven under pressure and the broader bid behind healthcare and financials cooling, the Dow gave back Thursday’s gains and then some. Investors who had been content to ride the index to records on non-tech sectors began to ask whether the AI trade itself still justified the multiples paid for the biggest names.
The pullback landed at the end of a choppy week that had already featured fresh sector rotation between tech and non-tech stocks, a second day of a global chip rout that began in Asia, and the closely watched SpaceX IPO earlier this month. Micron’s record earnings on Wednesday had provided a momentary boost, with the broader memory complex rallying into Thursday’s close. By Friday’s open, the relief trade had given way to a fresh round of questions about which technology companies can defend their valuations and which are exposed to the rising input costs of an AI buildout that keeps getting more expensive.
Big Tech Carries the Sell-Off
Megacap technology names drove Friday’s decline. The selling was broad, with every member of the Magnificent Seven trading lower in early going.
Apple dropped 6.1%, Nvidia fell 1.6%, Microsoft lost 3.5%, Amazon shed 3.1% and Meta Platforms gave back 2.7%. The Roundhill Magnificent Seven ETF, which offers equal-weight exposure to Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla, edged down 0.18% to $60.95 in premarket trading. The selling extended a rough stretch for the group that began earlier in the week.
Apple and Microsoft had already weighed on the Magnificent Seven earlier in the week after both announced price increases on consumer hardware tied to rising memory-chip costs. Apple fell more than 6% and Microsoft lost over 3% in a single session on those announcements. The price hikes framed the consumer hardware business as a price-taker on memory rather than a price-maker on its own products, and the market read that as a warning about consumer demand.
A report from the New York Times on Thursday added another layer of caution to the AI trade. OpenAI is considering holding off on its initial public offering, which many on Wall Street had expected this year, the Times reported, citing three people familiar with the company’s deliberations. The paper cited sagging SpaceX shares, which have fallen back toward their initial $150 price after a blockbuster debut on June 12, and the recent chip rout as reasons for the potential delay. For a structured read on whether the AI trade has crossed into bubble territory, the five warning signs that point to an AI bubble are now being parsed against every fresh earnings release.
- Apple: -6.1%
- Microsoft: -3.5%
- Amazon: -3.1%
- Meta Platforms: -2.7%
- Nvidia: -1.6%
- Roundhill Magnificent Seven ETF: -0.18% at $60.95 (premarket)
Memory Chips Tell the Other Story
The same forces pushing up costs for consumer hardware makers boosted a different group of chipmakers tied directly to memory production. Micron Technology had already surged 15.7% on Thursday after reporting record fiscal third-quarter revenue and a robust outlook for the August quarter. The rally broadened on Friday as the market began to draw sharper distinctions between companies selling into AI infrastructure and those paying for it.
Micron posted fiscal third-quarter revenue of $41.46 billion and adjusted earnings of $25.11 per share, both well ahead of consensus estimates of $35.84 billion and $20.78 respectively. The company said it expects revenue of about $50 billion for the current quarter, up from $11.3 billion a year earlier. Analysts had been looking for a revenue forecast of $43.58 billion, per LSEG. The numbers, detailed in coverage of Micron’s $41.46 billion Q3 revenue beat, reset the conversation. Sandisk jumped 22%, Applied Materials rose 13.4% and Western Digital climbed 4.9% in sympathy with the memory trade.
TheStreet Pro contributor Stephen Guilfoyle laid out the divide running through the sector in two sentences. The framework helps explain why the same news day can push Micron and Apple in opposite directions.
There are basically two stories going on here. One… growing demand for high bandwidth memory as well as traditional Flash and DRAM. Two… surging prices for anything having to do with memory or storage.
Micron’s long-term contracts backstop the picture. The company has signed 16 long-term agreements with customers like data center operators and automakers that lock in sales for three to five years, with expected financial commitments of $22 billion. Micron’s stock is up roughly 700% over the past year, lifting its market cap past $1 trillion.
- Micron: +15.7% (Thursday)
- Sandisk: +22%
- Applied Materials: +13.4%
- Western Digital: +4.9%
Asia Takes the Same Hit, Harder
The reassessment of AI-related valuations wasn’t confined to U.S. markets. Trading in South Korea was temporarily halted after an 8% decline in the benchmark Kospi index triggered a circuit breaker designed to curb panic selling, with the index ultimately closing down 5.8% at 8,411.21. The Kosdaq shed 4.10% to 851.37. Japan’s Nikkei 225 fell 4.15% to 69,360.88, while the broader Topix lost 1.32% to 3,963.36. Australian equities bucked the regional trend to edge up 0.18%. The session mirrored, and in Korea exceeded, the earlier-week global chip rout that wiped out over $1 trillion.
Japan’s largest tech conglomerate led the losses. SoftBank Group plunged more than 12%, while Advantest declined over 9% and Tokyo Electron fell more than 3%. European chip names caught the same move in early trade, with ASML down 2.2%, Infineon falling 3.7%, ASM International dropping 2.8% and ST Microelectronics losing 3.3%.
The pattern matched the U.S. session, with tech-heavy benchmarks selling off sharply while non-tech sectors held up better. David Makaryan, a senior partner at Alpha Pacific Group, said the moves reflect a broader shift in how investors approach technology valuations after a long rally.
The long-term investment case for AI remains compelling, but investors are becoming far more selective about which companies can justify the valuations the market has assigned to them.
Roundhill’s memory-focused ETF illustrates the concentration. The fund, which invests exclusively in companies that design, make, and sell memory chips and data storage devices, fell 12% on Tuesday before recovering on Friday’s Micron-led bounce. The fund’s two largest Korean holdings, SK Hynix and Samsung, together account for 44% of the ETF. Korean memory makers have spent the week as both the cleanest read on AI demand and the cleanest read on AI’s concentration risk.
- Kospi: -5.8% at 8,411.21
- Nikkei 225: -4.15% at 69,360.88
- Topix: -1.32% at 3,963.36
- ASML: -2.2%
Iran, Oil, and the Macro Underneath
Beyond the AI valuation debate, geopolitical and macro factors also drove the trading. A U.S. official said Iran was behind an attack on a cargo ship near the coast of Oman in the Strait of Hormuz, sailing under a Singapore flag. The United Kingdom Maritime Trade Operations said the ship reported no casualties and no environmental damage.
Despite the attack, oil prices continued to fall Friday as more tankers exited the Strait of Hormuz, easing concerns about supply disruptions. International benchmark Brent crude futures for August slipped 3.5% to $72.51 a barrel, and U.S. West Texas Intermediate futures for August declined 3.5% to $69.41 per barrel. The market’s reaction framed the cargo ship incident as contained rather than escalatory.
Fresh data this week showed the U.S. economy growing faster than previously estimated and inflation rising in line with expectations, prompting a slight reduction in Federal Reserve tightening bets. The University of Michigan consumer sentiment index rose to 49.5 from the prior month, with longer-term inflation expectations at the five-year window falling sharply to 3.3%. Investors read the combination of stronger growth and easing inflation as supportive for risk assets even as the AI complex sold off.
Gold edged higher to $4,063 an ounce but remained on track for a fourth consecutive weekly loss. The 10-year Treasury yield held near 4.37% as oil’s slide eased some pressure on longer-dated bonds. The macro backdrop appeared steadier than the equity tape suggested.
What the Friday Split Reveals
For now, the Dow’s pullback reflects a broader reassessment of technology valuations rather than a fundamental shift in the economic outlook. Micron’s record quarter and its $50 billion revenue forecast for the current period reinforced optimism around long-term AI infrastructure demand. Apple and Microsoft’s price hikes confirmed that the rising cost of memory is now flowing through to consumer prices. The two stories are real, and both ran through the tape on the same Friday, a pattern likely to keep the AI trade split for the rest of the quarter.
Investors are drawing sharper distinctions between companies positioned to benefit from the AI buildout and those facing rising expenses because of it. Investors will keep parsing earnings, economic data and geopolitical developments for clearer signals on where the rally, and the broader AI investment cycle underpinning much of this year’s gains, goes from here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investment values can fall as well as rise, and past performance is not a guide to future results. Readers should consult a qualified financial professional before making investment decisions. Figures cited are accurate as of publication on June 26, 2026.
