Tech Stocks Plummet as Investors Rotate Out of Sector

The US stock market closed the week on a down note as investors rotated out of tech stocks and into defensive sectors. The S&P 500 fell 0.1%, while the Nasdaq 100 lost 1.1% on Friday.

The Dow Jones, however, continued its streak of three consecutive weeks in the black, albeit with a slim gain of just 0.1%. The Russell 2000 index, which tracks small-cap stocks, was one of the few bright spots, rising 0.1% for the week.

Among ETFs tracking major indexes, the SPDR S&P 500 ETF (SPY) dropped 0.5%, while the Invesco QQQ Trust (QQQ) fell 1.5%. The VanEck Semiconductor ETF (SMH), on the other hand, lost a significant 4.4% of its value.

OpenAI's potential delay in its initial public offering (IPO) is believed to be behind the decline in semiconductor stocks. JPMorgan analysts noted that this news has triggered concerns about the 'sustainability of their infrastructure spending given the delay in funding from the capital markets.'