Nasdaq-100 futures fell sharply on Friday, as mounting jitters over artificial intelligence spending weighed on sentiment and dragged global tech stocks lower.

Nasdaq-100 futures
 dropped 1.6% as tech stocks came under scrutiny. Dow Jones Industrial Average futures
 slipped 266 points, or 0.5%, while S&P 500 futures
 lost 0.8%.

Global chip stocks extended declines on Friday, with U.S.-listed shares of chipmakers and adjacent companies falling in premarket trading.

The iShares Semiconductor ETF (SOXX)
 was down by nearly 3%, while the VanEck Semiconductor ETF (SMH)
 had fallen by more than 2%. Shares of Applied Materials
 and LAM Research
 shed 4% and 3%, respectively. Intel
, KLA Corporation
 and Arm
 were around 3% lower, while Micron
 lost more than 1%. Nvidia
 shares were 2% lower.

Those losses added to declines seen in the previous session, which were also led by semiconductors. Adding to the downbeat sentiment, Chinese startup Moonshot AI unveiled a new model that it says narrows the gap with the top offerings in the U.S.

The SMH is down 6.9% for the week, on pace for its third weekly decline in four weeks. The major stock benchmarks are also down week to date, with the S&P 500 off by 0.6%, while the Dow and Nasdaq have slipped 0.2% and 1.5%, respectively.

A sell-off in Asia-Pacific markets accelerated on Friday, with chipmakers extending their decline. The sell-off also reached Europe on Friday.

In a note on Friday morning, strategists at BBH said investors are “increasingly questioning the sustainability of the ongoing AI capital expenditure boom.”

“The [Bank for International Settlements] annual economic report cautions that boom-bust cycles are a regular feature of past investment surges driven by transformative technologies,” they said.

Meanwhile, Barclays strategists appeared unperturbed by the tech volatility in a Friday note.

“While Tech volatility may persist in the near term, we believe that the reset in positioning should ultimately prove healthy, creating more attractive entry points for long-term investors targeting the structural AI theme,” they said.

Alongside chips, shares of Netflix
 were a major laggard Friday, falling more than 11% after the company posted second-quarter results that were roughly in line with expectations as well as a disappointing earnings forecast.

Further escalations in the U.S.-Iran war also remained in focus on Friday, with oil prices rising in their wake. U.S. West Texas Intermediate crude futures
 were last trading above $80 per barrel, while international benchmark Brent crude futures
 were above $85.

Kuwait said on Friday that Iran attacked a power and water desalination plant, and U.S. Central Command said overnight that it had completed its sixth consecutive evening of strikes against Iran, hitting dozens of military targets, including logistics infrastructure and maritime capabilities.

Iranian officials also claimed on Friday to have targeted U.S. military forces in Syria and Bahrain, widening Tehran’s attacks further across the Middle East.

This comes as the fragile truce reached last month has fractured, once again disrupting energy flows through the strategically vital Strait of Hormuz, which typically handles around 20% of the world’s oil traffic.