The S&P 500, Nasdaq Composite, and Dow Jones all closed lower, with the S&P 500 and Nasdaq experiencing their largest percentage declines. The selloff was broad, with all three indices down by over 1%, and the Nasdaq led the way with a 1.40% decline. The market's tone was decidedly risk-off, as investors reacted to a selloff in chip stocks, which accounted for a significant portion of the declines. The S&P 500's 1% drop marked the start of a potentially losing week, with the index down 1.01% for the day. The Nasdaq's 1.40% decline was driven in part by concerns about China's latest AI breakthrough, which rattled tech stocks. The Dow Jones, while also down, saw a slightly smaller percentage decline of 0.77%, suggesting some resilience in traditional sectors. The selloff in chip stocks was a notable theme, with the sector accounting for a significant portion of the market's declines. The selloff was led by TSMC, which reported earnings that disappointed investors, and was exacerbated by a broader selloff in the sector. The market's tone was further influenced by renewed Middle East tensions, which led to a rise in mortgage rates, and by a broader sense of hesitation in the market, with investors questioning the sustainability of recent gains.