AI Stock Unwind Hides Beneath Resilient Broader Market: Chart of the Day
Yahoo Finance's Chart of the Day reveals a violent unwind in AI and semiconductor stocks beneath a resilient broader market. While the S&P 500 remains stable with strong breadth (two-thirds of stocks above 200-day moving averages), chip stocks have entered a bear market, with the PHLX Semiconductor Index breaking below 12,000 before recovering. The gap between expected volatility in semiconductor stocks (measured by the Cboe SMH Volatility Index) and the S&P 500 (VIX) has reached nearly 47 points, a record divergence. This contrasts sharply with the broad market panic during April 2025's 'Liberation Day' tariffs. The sell-off erased roughly $3.3 trillion from global chip stocks. Goldman Sachs's high-beta momentum basket suffered its worst July decline since April 2009 as crowded trades reversed. The article notes that if the SOX holds 12,000 with firm participation, it suggests the market is digesting the AI unwind, but losing that level would indicate stress spreading beyond chips.
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