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Chip volatility premium stays near 45 as semiconductor stocks unwind
The sell-off has erased about $3.3 trillion from global chip stocks, while the VanEck Semiconductor ETF remains paired with elevated expected 30-day swings.
Yahoo Finance’s Chart of the Day highlights a widening gap between chip stock expected movement and broader US market volatility, showing that traders are bracing for larger swings in the most important AI-linked names even as the overall market holds up.
Using option-implied measures, the Cboe SMH Volatility Index for the VanEck Semiconductor ETF (SMH) and the Cboe VIX for the S&P 500 are compared, with the extra turbulence traders expect from chip stocks recently reaching nearly 47 volatility points and still sitting close to 45.
The article says the market damage has been severe, with the sell-off erasing roughly $3.3 trillion from global chip stocks by the recent low, and the Philadelphia Semiconductor Index (SOX) breaking below its key 12,000 level before climbing back above it.
While Goldman Sachs’s high-beta momentum basket fell by about one-third from its June peak and its July drop was the worst since April 2009, the broader market has absorbed the rotation, with about two-thirds of S&P 500, S&P 400, and S&P 600 stocks still above their 200-day moving averages and the S&P 500 advance-decline line reaching a record before pulling back.
Yahoo Finance adds that investors are watching whether the SOX can hold above 12,000 alongside firm participation in the broader market, as that would support the view that investors are digesting an AI unwind rather than stress spreading beyond chips.
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