On Friday, the PHLX Semiconductor Index fell 1.6%, bringing its cumulative decline from the record high to 20% and entering bear market territory. The NASDAQ-100 Index fell 1.5%, the S&P 500 Index fell 1%, and the Dow Jones Industrial Average dropped 0.8%. Escalating conflict between the U.S. and Iran pushed West Texas Intermediate crude up 4.3% to $82.34 per barrel, while the 10-year U.S. Treasury yield remained essentially flat at 4.55%. Kimi K3, launched by Moonshot AI using a low-cost, open-source strategy, reignited a 'DeepSeek moment,' reviving market concerns over the sustainability of AI-related capital expenditure returns and chip demand, triggering a sell-off in the high-valuation AI sector. Semiconductor stocks plunged, with AI semiconductors and data centers significantly underperforming, while AI software held up relatively well. Goldman Sachs TMT trading specialists noted that investor anxiety has risen markedly over the past 48 to 72 hours. Since its late-June peak, the Philadelphia Semiconductor Index has underperformed the broader market by approximately 20 percentage points, posting its worst weekly performance since April 2025 this week.