Just when it appeared the AI trade had found a temporary floor this week, a barrage of earnings reports sent shockwaves through the technology sector, driving another significant decline on Friday. Nowhere was the damage more pronounced than in semiconductor stocks, with 72% of the group falling 5% or more in a single session. This type of price action has become increasingly common, potentially signaling that distribution is taking hold following the group’s enormous multi-year advance. In fact, over the past five months, dating back to the group’s June peak, the count of these distribution days has reached 11. As the chart below shows, this threshold was reached only twice before: December 2008 and July 2000.
Each Chart of the Week highlights a theme, idea, or historic event that stood out to me. If you find it interesting, feel free to share it with friends or colleagues.
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