Semiconductor Crowded Trade Unwinding
The semiconductor sector, which has driven recent market gains, is now experiencing a significant pullback.
Too little corroboration in the last 3 days to call a trend (5 articles). Watching for it to gain traction. It's spreading across NDX & SPX — a theme crossing asset classes.
"AMD shares dropped about 8.1% in premarket trading. The reaction was especially strong because AMD's stock has already gained about 142% this year. Investors appear to believe that a big rise in the stock price had already priced in very strong future growth"
"Memory-chip makers, which have had a sharp rally this year, extended their recent pullback, with Micron Technology and Sandisk dropping 7.2% and 9.5%, respectively."
""The market reaction today was more driven by positioning rather than fundamentals," said Ohsung Kwon, chief equity strategist at Wells Fargo. "The semiconductor sector was way overbought. That's why we're seeing the selloff.""
"A pullback in chip stocks weighed on the tech-heavy Nasdaq."
"The chip sector has been the engine of this entire bull run — and today it became the primary drag."