Asian Stocks Are Down 10% From June Highs. That Could Be Bad News for This Semiconductor Index.

The iShares Semiconductor ETF (SOXX) has dropped 22.9% since June, tracking a broader retreat in Asian equities that have shed 10% since June 22. The decline reflects mounting concern that AI hyperscalers may pull back on data center capital expenditure, threatening the spending cycle that drove chip stocks higher through the first half of 2024.

Semiconductor names with heavy exposure to data center buildouts face immediate pressure as the market reassesses the sustainability of AI infrastructure investment. The 22.9% drawdown in SOXX significantly outpaces the 10% decline in broader Asian markets, signaling investor anxiety is concentrated in the chip sector. The divergence raises the question of whether this repricing is a temporary digestion of gains or the start of a longer correction as expectations for hyperscaler spending moderate.