Netflix Guidance Disappoints, Sending US Stocks into Free Fall

The US stock market saw significant losses on Friday as investors digested Netflix's mixed second-quarter results and cautious forward outlook. The S&P 500 fell about 1.01%, while the Nasdaq-100 dropped roughly 1.49% and the Dow Jones Industrial Average edged 0.77% lower.

Chipmakers continued to face pressure following Taiwan Semiconductor Manufacturing's higher capital expenditure guidance of $60-64 billion, up from $52-56 billion, despite strong underlying demand. The VanEck Semiconductor ETF (SMH) lost 2.18%, while the broader Vanguard Information Technology ETF (VGT) slipped about 1%.

Netflix reported second-quarter results with revenue of $12.56 billion (slightly below estimates) and EPS of $0.80 (a beat), but lowered Q3 guidance and narrowed its full-year 2026 revenue outlook after market close on Thursday. The company also announced it would reduce the frequency of its viewing-hours/engagement data releases starting in 2027.

Oil prices surged, with crude prices up 4.4%, on Middle East escalation fears and U.S.-Iran tensions. UnitedHealth Group continued to hold gains from its strong Thursday report, while GE Aerospace reported solid second-quarter results before the open on Friday, with aerospace demand remaining robust.