Nvidia Leads Chip Stocks Higher After 3-Session Sell-Off: What's Going On?

Author: Shanthi Rexaline | August 06, 2024 08:53am

Semiconductor stocks could leap back to life, led by Nvidia Corp. (NASDAQ:NVDA), going by the trend in the premarket session.

The iShares Semiconductor ETF (NASDAQ:SOXX), which is an exchange-traded fund that tracks the Philadelphia Semiconductor Index, has been moving lower for the past three sessions and in the process has shed about 13.7%.

On Thursday, chip stocks swooned along with the broader market, reacting to the weak manufacturing and job market data. The weakness was aggravated Friday as Intel Corp.’s (NASDAQ:INTC) earnings disappointment and rumors of Nvidia potentially facing an anti-trust probe added to macro concerns.

The losses extended into Monday’s session as the unwinding of the yen carry trades triggered a global sell-off, which impacted the chip sector too. Nvidia was hit with another negative headline as The Information reported that the company might be delaying the second iteration of its Blackwell chips due to some design flaws.

See Also: Best Semiconductor Stocks

Nvidia is now in bear-market territory, having pulled back about 29% from its June 20 high of 140.76. The SOXX has shed about 24% from its July 11 high, also in bear territory.

Bargain hunters may swoop up these stocks in the absence of any major negative catalysts.

The next big catalyst for the sector will likely be the earnings report from Nvidia, due Aug. 28.

According to Benzinga Pro data, in premarket trading:

• Nvidia climbed 2.02% to $102.48
• Intel gained 1.39% to $20.39.
• Arm Holdings plc (NASDAQ:ARM) climbed 2.04% to $112.70.
• SOXX rose 0.72% to $204.63.

Read Next:

• Strategist Warns ‘There’s A Serious Collapse That’s Coming’ After Monday’s Global Market Crash: ‘Tons And Tons Of Yen Carry Trades…Have To Be Closed Out’

Image via NVIDIA

Posted In: ARM INTC NVDA SOXX