The semiconductor index fell 21% in July, its steepest monthly decline in nearly 16 years. The selloff ended a one-way upward trend that had defined equity markets for much of the year. The catalyst is a broad reassessment of whether AI-driven chip demand can sustain its current growth trajectory.
A 21% monthly drop in semiconductors is not contained to chip stocks alone. These companies sit at the foundation of AI infrastructure spending, so a repricing here ripples into cloud providers, data center operators, and tech-heavy index funds like QQQ and SMH. Investors holding broad equity index funds are exposed through their technology weightings, even if they own no chip stocks directly.
Next scheduled earnings from major chip companies including Nvidia (late August). Monthly ISM Manufacturing data, first business day of each month. Next Fed rate decision, September 17-18.
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