Don't just focus on Nvidia (NVDA.US) as semiconductor stocks lagged the S&P 500 this month
1min read According to Bespoke Investment Group, despite Nvidia's (NVDA.US) recent stock surge, semiconductor stocks underperformed the S&P 500 this month.
The S&P 500 index rose 0.7% on Wednesday, closing at 5,792.04, a record high. Nvidia's stock price fell nearly 0.2% during the day's trading, trimming its October gain to 9.2%.
Bespoke noted in an email report on Wednesday that while Nvidia's "technical action may have improved, the semiconductor sector as a whole has not been strong." They also said that the "Philadelphia Semiconductor Index" had been held back all summer, even though it had surpassed its 50-day and 200-day moving averages.
Bespoke's analysis showed that the semiconductor index's September decline was more severe than in August, and the subsequent rebound was weaker. The Philadelphia Semiconductor Index (SOX.US) rose 1.1% on Wednesday, according to FactSet data, while the Invesco Philadelphia Semiconductor ETF (SOXQ.US) also rose 1%.
Bespoke pointed out that while the semiconductor sector's sell-off in early September was not as severe as in August, the index had already seen "higher lows," which could be a positive sign for the sector, even though it has not yet reached new highs.
Meanwhile, the iShares Semiconductor ETF (SOXX.US), which tracks US-listed semiconductor stocks, also rose 1% on Wednesday. Although the ETF has risen 2% since the beginning of October, it has still fallen 9.4% over the past three months. In contrast, the S&P 500 index has risen 3.9% over the past three months.
Overall, US stocks performed well on Wednesday, with the Dow Jones Industrial Average rising 1% to a record high, while the Nasdaq Composite, which is dominated by technology stocks, rose 0.6%.
As of Wednesday, the cumulative gain for the S&P 500 index in 2024 was 21.4%, slightly lower than the 22.5% year-to-date gain for the iShares Semiconductor ETF. This indicates that the semiconductor sector had a strong start to the year but has recently lagged, according to FactSet data.
