The S&P 500 is 2.0% below its June 2 all-time high. It has been hovering around 7,500 since May 14. Beneath that calm, momentum stocks have been hard hit. The semiconductor index (SOXX) is down 20.3% from its June 22 peak. The Roundhill Memory ETF (DRAM), which started trading on April 2 around $28 and soared 208% to $80.7 on June 22, is down 35% since then.
These developments have all weighed on the S&P 500 Information Technology sector, which we downgraded to market weight on December 7, 2025. Meanwhile, Financials and Health Care, which we are overweight, have held up well. Investment banking is booming. Biotech is performing very well.
Here's what has gotten our attention recently:
(1) Technology: Semiconductors and Memory Correct. Margin calls on Samsung and SK Hynix in South Korea weighed on US semiconductor and memory chip stocks in recent days. Chinese AI lab Moonshot added to the pressure on Friday, launching Kimi K3, a 2.8-trillion-parameter open-weight model it says rivals the best from OpenAI and Anthropic, reviving DeepSeek-era fears and pushing the SOXX lower. The S&P 500 Semiconductors stock price index is likely to fall another 12% to its 200-day moving average (chart).
