The tech-heavy Nasdaq fell on Friday as investors sold off chip stocks on worries about big spending on artificial intelligence ahead of the next batch of megacap earnings reports, while oil prices fell, giving Wall Street some support despite continued Middle East hostilities.

The S&P 500 ended near flat but its biggest weight came from the ⁠S&P 500 technology index, which underperformed the broader market as chip stocks fell.

As investors await results from megacaps Microsoft, Amazon.com, Meta and Apple Inc, their enthusiasm was dampened by Alphabet’s announcement late on Wednesday that it planned to increase capital spending even as it burned through cash.

According to Peter Andersen, CEO of Andersen Capital Management, after piling into technology stocks in recent years, on the promise of growth from AI, investors have become concerned about the need for ever-increasing capital expenditures for AI.

“People are wondering, how do we make sense of all these costs, and how much more patience do we need to have before we actually translate that into real profits?” Anderson said.

“The fear of missing out is becoming a fear of massive overbuilding.”

Late Thursday, Intel forecast quarterly profit and revenue that beat Wall Street estimates and outlined plans to increase spending over the next two years. Still, shares of the chipmaker sank on Friday, along with the Philadelphia SE Semiconductor index.

According to preliminary data, the S&P 500 rose 3.74 points, or 0.07%, to close at 7,413.30, while the Nasdaq Composite fell 157.35 points, or 0.63%, to 24,980.34. The Dow Jones Industrial Average rose 235.87 points, or 0.46%, to 51,947.52.

Among the S&P 500’s 11 major industry indexes, real estate outperformed during the session. The sector’s leading gainer was Digital Realty Trust, which rose after raising its full-year forecast for funds from operations.

Also offering some relief, crude oil futures fell more than 3% after traders booked profits from a massive rally over the past five sessions and sources said China was pushing for a resumption of US-Iran peace talks. Still, US missiles hit targets across Iran after President Donald Trump vowed “major military punishment” for Tehran and its Houthi allies in Yemen.

“Any headlines right now involving conflict, it drives oil and then oil drives the financial markets,” Anderson said, adding that changes in oil prices can affect consumer and corporate spending.

Also, the Trump administration imposed new tariffs of 10% and 12.5% ​​on goods from 60 trading partners, citing lax enforcement of forced labor restrictions. The move comes as the temporary 10% global tariff expires.

Data on Friday showed activity in the US services sector accelerated in July, helped by spending during the FIFA World Cup and the Independence Day holiday, while growth in the manufacturing sector slowed to its slowest since March.

Among other individual gainers, shares of SLB rose after the oilfield services firm beat second-quarter profit expectations.