SKHY
SOXX
The surface looked calm. The engine was on fire.
The broader market is still hanging in there, but semiconductors are doing their best impression of a dropped phone screen. The iShares Semiconductor ETF, better known as SOXX, has fallen more than 20% from its June 2 peak, which means the sector has officially wandered into bear market territory.
That matters because semis are the market’s “tell.” When chips are ripping, people start talking about AI, cloud spend, and the next growth wave like it’s all one giant victory lap. When they’re getting crushed, suddenly everyone remembers valuation exists.
Why the selloff is spreading
Veteran strategist Ed Yardeni says this isn’t just random turbulence. He’s pointing to a nasty combo of:
- heavy margin calls hitting South Korean tech giants Samsung and SK Hynix
- weakness spilling into U.S. memory chip names
- fresh AI competition fears after Moonshot launched its huge open-weight Kimi K3 model
That last part is the real buzzkill. If more powerful models keep showing up with lower cost and fewer guardrails, investors start wondering whether the “AI gold rush” has already turned into a crowded mall parking lot.
What investors should watch
Yardeni thinks the S&P 500 Semiconductors index could still drop another 12% to its 200-day moving average. Translation: he’s not exactly reaching for the dip-buy button.
And that’s the kind of warning that can ripple beyond chipmakers themselves. If semis keep sliding, you can get pressure on:
- AI hardware suppliers
- memory and storage plays
- high-multiple tech stocks that were priced for perfection
Big picture: the market may still look calm on the outside, but under the hood, tech is getting a serious stress test. If semis are the canary in the coal mine, the bird is currently doing backflips.