The price of the SOXX (NYSE:SOXX) semiconductor index is testing the uptrend that has been in place since late-2022. That could have a big bearing on the rally in US stocks with the index tracking all of the large chipmakers, such as Nvidia and Qualcomm.
SOXX – Daily Chart
The price of SOXX has fallen from highs near $260 in July and now trades at $216 after breaking the uptrend line. A correction could form if it cannot hold this as a support.
The semiconductor industry has been the driver of modern tech innovation, and global sales have hit a record $55.3 billion in September, according to the Semiconductor Industry Association (SIA). That is the highest monthly total ever, underscoring the industry’s role in driving advancements from artificial intelligence (AI) to electric vehicles (EVs).
The AI boom has driven the rally in US stocks as investors looked ahead to continued strong sales in chips, however Nvidia’s latest earnings hint at a slowdown in the growth boom. The AI trend has also struggled to bring big gains for companies outside of data centers and cloud computing storage.
The next week or two could be important for the overall rally if the current price level fails to find buyers. Global tensions are rising with the Ukraine war and a potential for profit-taking could be a theme.
Billionaire investor Ken Fisher is still a fan of the AI trend buying up $481.5 million of Nvidia shares and $262.8 million worth of Microsoft in Q3.
