Chip stocks end the week lower as AI financing and oil worries weigh

How did chip stocks do this week?

Chip stocks ended the week lower after a sharp Thursday selloff. The iShares Semiconductor ETF (Nasdaq: SOXX), a fund of chipmaker shares that trades like a stock, fell 3.1% over the week.

Why it matters: The week started well. The fund rose 1.7% on Monday, ending a long losing streak. It fell 0.4% on Tuesday and jumped 2.1% on Wednesday.

By the numbers: Thursday brought the setback, when the fund tumbled 6.8%. On Friday it rose 0.5%, a modest recovery.

Large chipmakers mostly ended the week lower. Nvidia (Nasdaq: NVDA) slid 1.5% and lost $76 billion in market value. Advanced Micro Devices (Nasdaq: AMD) slid 2.3%. Micron Technology (Nasdaq: MU) edged down 0.1% after it jumped 2.5% on Friday.

The broader market moved less. The Nasdaq-100, an index of the biggest Nasdaq-listed companies that leans on tech, fell 0.8% for the week. The S&P 500, the index behind many retirement-plan funds, fell 0.5%. The Dow Jones Industrial Average rose 0.4%.

Why did chip stocks fall on Thursday?

Reports tied the selloff to higher oil prices and a wider retreat in technology shares. They also pointed to worries about how companies are paying for heavy spending on artificial intelligence, or AI.

Chipmakers are among the companies most tied to that spending. Doubts about how it is financed can reach their shares quickly.

The losses were wide. Applied Materials (Nasdaq: AMAT) tumbled 8.2% and Advanced Micro Devices tumbled 8.1%. Micron dropped 6.3% and Nvidia fell 4.4%. Coherent tumbled 12.5% and was among the hardest hit.

The Nasdaq-100 slid 2.9% that day, and the S&P 500 slid 1.2%. Oil remained in focus.

How did Lam Research fare after its earnings?

Lam Research (Nasdaq: LRCX) reported quarterly results after the close on Wednesday. They narrowly beat analysts' estimates, yet the shares fell in late trading.

On Thursday the stock tumbled 11.8%. Over the week it tumbled 12.8%, and the company lost $42 billion in market value.

The reaction shows that a results beat may not lift a stock when worries about the whole sector are building. It was not clear from reports what, if anything, in the results disappointed investors.

How far are chip stocks below their highs?

The chip fund stood 27.0% below its 52-week high, the highest price in the past year, at Friday's close. Even after Monday's rebound, the chip index stayed well below its June record, according to reports.

Lam Research stood 46.9% below its 52-week high, and Applied Materials stood 47.8% below. Micron was 27.7% under its high, AMD 20.4% and Nvidia 11.8%.

The longer view looks different. A $1,000 stake in the chip fund a year ago would be worth $1,643 now. The Nasdaq-100 has gained 14.7% so far this year, despite the recent pullback.

What comes next for chip stocks?

What’s next: Several scheduled events could move the group. The Federal Reserve announces its interest-rate decision on Oct. 28 at 2 p.m. ET, followed by the chair's press conference.

On Oct. 29 at 8:30 a.m. ET, the government releases its early estimate of economic growth for the latest quarter. September figures on household income and spending arrive at the same time, including a price gauge the Fed follows.

Advanced Micro Devices is scheduled to report quarterly results on Nov. 3. Its report may give fresh information on the sector. Further reports on how companies pay for AI spending could also move chip shares, in either direction.