01:13 PM EDT, 07/17/2026 (MT Newswires) -- (Updates with index/price moves, macroeconomic data and company/geopolitical news from the first paragraph.)

US equity indexes slumped as growth sectors sold off while crude oil jumped after Iran widened its attack on Washington assets in the Middle East.

The Nasdaq retreated 0.9% to 25,657.2, with the S&P 500 down 0.5% to 7,493.6 and the Dow Jones Industrial Average lower by 0.4% to 52,362.8 after midday Friday. Communication services, consumer discretionary, and technology led decliners, while energy was the sole gainer.

"A Chinese startup called Moonshot announced it had a new Kimi K3 model that it claims is on par with American AI offerings from OpenAI and Anthropic," Derek Holt, head of capital market economics at Scotiabank, said in a note. "It's a replay of the prior market scare around China's DeepSeek which markets ultimately shook off and which itself may be important guidance for today. Still, AI and AI-related stocks across the tech world are under negative pressure."

Netflix ( NFLX ) , part of the communication services sector, reported mixed fiscal Q2 results overnight, with earnings above consensus while sales missed, and Q3 guidance lagging market expectations. Shares sank 6.8%, helping lead the S&P 500 and the Nasdaq lower.

Shares of Intuitive Surgical ( ISRG ) slumped nearly 13%, the worst performer on the Nasdaq, as growth in the company's da Vinci robotic surgery system in the US moderated amid changes in Affordable Care Act subsidies.

Meta Platforms ( META ) is in talks to rent out computing power from its data centers to Anthropic in a deal that could be worth up to $10 billion over two years, The New York Times reported Friday, citing people with knowledge of the discussions.

Apple ( AAPL ) has sent personal legal warnings to dozens of former employees now working at Microsoft ( MSFT )-backed (MSFT) OpenAI to find proof that the artificial intelligence company stole its trade secrets, the Financial Times reported Friday, citing people familiar with the matter. Shares of Microsoft ( MSFT ) dropped 1.7%, one of the biggest laggards on the Dow.

In geopolitical news, US Central Command said in a post on X that it completed the sixth consecutive wave of attacks against Iran, degrading the nation's military capabilities and holding it "accountable" for recent attacks on commercial shipping in the Strait of Hormuz. President Donald Trump has threatened to launch broad-based air strikes on Iranian infrastructure and has also declined to rule out a ground assault on Iran's coast or islands, Reuters reported.

In response, Iran announced attacks on Gulf countries that host US airbases, including Bahrain, Qatar, and Kuwait, the Reuters news report said. Authorities in Kuwait said one of the country's power generation and water desalination stations had been hit in an Iranian attack, it added. Iran recently warned the US that it has asked its allies, Yemen's Houthis, to stand ready to close the Red Sea chokepoint.

The front-month US West Texas Intermediate jumped 4% to $82.10 a barrel, and global benchmark North Sea Brent advanced 3.9% to $87.50 a barrel.

US Treasury yields traded mixed, with the 10-year down 2.4 basis points to 4.55%. The two-year rose 1.6 basis points to 4.17%.

In precious metal markets, gold futures edged up 0.8% to $4,022.3, and silver futures climbed 0.1% to $56.25.

In economic news, the University of Michigan's preliminary consumer sentiment index rose to 54.4 in July from 49.5 in June, above expectations for 51.0 in a Bloomberg-compiled survey.

Michigan said that despite the highest index reading since February, consumers remain dissatisfied due to high prices, adding that it would be difficult to maintain the recent improvement in sentiment if gasoline prices rebound. "Interviews for this release spanned June 23 to July 13, with more than 70% completed before the resumption of US strikes against Iran on July 7 and the subsequent increase in gas prices."

Michigan poll respondents saw one-year inflation expectations at 4.2%, down from 4.6% in June, while five-year inflation expectations remained at 3.3%.