Nvidia slides 5% as chip stocks lead tech losses

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Shares of Nvidia (NVDA) sank as much as 5% on Friday as a sell-off in chip stocks led to the downside.

The AI chip heavyweight was under pressure along with other semiconductor names on the last day of what has been a volatile week for stocks.

Shares of Broadcom (AVGO) also sank nearly 9% after the semiconductor giant's lackluster sales forecast for the fourth quarter overshadowed its earnings beat.

Taiwan Semiconductor (TSM), Advanced Micro Devices (AMD), and chip-making giant ASML (ASML) each slid more than 4%.

The Tech (XLK) sector led the markets lower on Friday after the unemployment rate fell to 4.2%, prompting some investors to believe the Federal Reserve will cut rates by 25 basis points instead of 50 basis points at its policy meeting this month.

Investors have increasingly questioned whether capital expenditures for tech infrastructure will continue and if the AI boom has peaked.

Nvidia's stellar growth streak has underpinned the market's rally this year. The stock led a market rebound last month, but failed to continue the rally in late August after a lackluster reception for the company's quarterly results.

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