Despite Nasdaq's rise, semiconductors fall for 2 consecutive weeks...Is the tech stock rebound temporary?

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The Nasdaq Composite jumped 1.1% on the back of a tech stock rebound, but semiconductor stocks continued their unstable trend, falling for two consecutive weeks. In contrast, the Dow Jones Industrial Average held near its all-time high, sharply dividing the fortunes of the tech-centric market and the traditional industry-centric market.

According to FXLeaders, a specialized foreign exchange media outlet, on July 6 (local time), the Nasdaq Composite rose 1.1% and the S&P 500 Index (SPX) rose 0.4% in the US stock market, which opened after the Independence Day holiday. The Dow Jones Industrial Average remained flat. Marvell Technology (MRVL) jumped 4% and Teradyne surged 4.4%, leading the tech stock rebound.

However, the gains of these two companies only partially recovered their previous sharp declines. Tech stocks performed poorly last week, and investor sentiment was significantly dampened. Concerns that major tech companies' capital expenditures are increasing rapidly, significantly outpacing their profit growth, are weighing on the market.

The Dow Jones Industrial Average rose about 2% last week, approaching the 53,000 mark, and gained 400 points to set a new all-time high. Weaker-than-expected employment figures dampened interest rate hike expectations, contributing to the index's rise. The relatively low weighting of highly volatile tech stocks was also cited as a reason for its stronger performance compared to the Nasdaq and S&P 500 indices.

The instability in the semiconductor market remains a burden. The VanEck Semiconductor ETF (SMH), which tracks major semiconductor stocks such as Marvell Technology, Advanced Micro Devices (AMD), Micron Technology (MU), and NVIDIA (NVDA), fell 3.2% last week, marking its second consecutive week of decline. Investors are turning their attention to relatively stable sectors such as healthcare, finance, and food.

Semiconductor stocks showed signs of recovery by rebounding on Monday, but the market is focusing on Wednesday's meeting chaired by new Federal Reserve (Fed) Chairman Kevin Warsh. While the media reported a low likelihood of new interest rate cuts, it assessed that discussions to gauge the policy direction under the Warsh regime would be an important benchmark for future market trends.

[Article Summary]

-The Nasdaq Composite rose 1.1% on the back of a tech stock rebound, and the S&P 500 Index rose 0.4%, but the Dow Jones Industrial Average held near its all-time high.

-The VanEck Semiconductor ETF fell 3.2% last week, marking its second consecutive week of decline, and concerns were heightened by the rapid increase in capital expenditures by tech companies and the disparity in profit growth rates.

-Investors are moving to stable sectors such as healthcare, finance, and food, while focusing on Wednesday's Fed meeting and Kevin Warsh's policy direction.

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