Semiconductor Weakness No Longer Dragging Down the Broader Market
The S&P 500 has been remarkably resilient during sharp selloffs in the semiconductor index this year, with software stocks even posting gains on such days.
On trading days when the Philadelphia Semiconductor Index (SOX) has fallen at least 3%, the S&P 500 has declined an average of just 0.78% this year—less than one-third of the 2.38% average drop recorded during similar sessions from 2006 to 2025.
For the first time since at least 2001, software stocks posted positive returns during these semiconductor selloffs. Even when the SOX fell at least 2%, the S&P 500's average decline was only 0.70%, compared with a 1.76% average over the past 20 years.
This pattern suggests that investors have been rotating into other areas of technology, offsetting the drag from semiconductors and keeping the broader market unusually stable.
Source: The Kobeissi Letter