Tech Stocks Retreat as AI Growth Cools, Semiconductor Sector Stumbles

U.S. tech stocks faced significant pressure on Friday, with the Nasdaq Composite dropping 1.2% amid growing concerns over AI investment sustainability and weak semiconductor earnings. The Philadelphia Semiconductor Index hit its lowest level since mid-April, reflecting broader sector unease.

Marvell Technology led the declines, plummeting nearly 19% after disappointing data center revenue sparked a Bank of America downgrade. The selloff echoed Bitcoin's early volatility patterns. Nvidia fell 3.3% as China sales uncertainty persisted, marking its worst weekly performance since May.

Profit-taking emerged as a key driver following technology's August rally. While the S&P 500 posted its largest daily decline this month, it still closed August with a 1.9% gain. The retreat suggests markets may be recalibrating expectations after AI-driven euphoria pushed valuations to record levels.