Chip stocks-linked exchange-traded funds (ETFs) witnessed a substantial decline during Monday’s pre-market trading.
What Happened: As per Benzinga Pro, Direxion Daily Semiconductor Bull 3X Shares SOXL plummeted by 17.93%, while GraniteShares 2x Long NVDA Daily ETF NVDL dropped by 18.49%. ProShares Ultra Semiconductors USD was trading lower by 16.72%.
Similarly, VanEck Semiconductor ETF SMH and iShares Semiconductor ETF SOXX also recorded losses, falling by 6.55% and 6.25% respectively.
Why It Matters: This significant drop in semiconductor ETFs is part of a larger global market “bloodbath.” On Friday, the U.S. stock markets closed lower due to a disappointing jobs report, which sparked recession fears and led to a shift in investor sentiment.
On Monday, Asian markets opened with Japan’s TOPIX index dropping over 6%, triggering circuit breakers and halting trading. This was part of a broader impact felt across the Asia-Pacific region. The U.S. market also showed a negative performance for the third straight session, with tech being the worst performer.
The development also coincides with Nvidia Corporation NVDA facing delays in the production of its upcoming AI chips due to design issues. This setback is expected to impact major clients including Meta Platforms Inc. META, Alphabet Inc. GOOG GOOGL, and Microsoft Corporation MSFT.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
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