Semiconductor ETFs start July with more weakness, hit 52-week lows
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The information technology sector is Fridayâs worst performing market segment, dragged lower by semiconductor stocks, which have started out July by continuing the weak performance they showed in the first half of the year. With the latest step down, exchange traded funds tied to the semiconductor space have moved to new 52-week lows.
The popular VanEck Semiconductor ETF (NASDAQ:SMH), which is made up of 25 holdings that together offer investors exposure to semiconductor production and equipment firms, has fallen 4.6% in Friday's early action. The decline has taken SMH to a near 20-month low.
Taiwan Semiconductor Manufacturing Co (TSM), NVIDIA Corp (NVDA), and Texas Instruments (TXN) are the three largest positions in SMH which cumulatively makeup 23.5% of the fund. All three stocks have not helped the ETFs performance as TSM finds itself lower by 4.6%, NVDA has dropped 3.8%, while TXN has dipped 4.2%.
SMH is not the only semiconductor ETF to fall to a new 52-week low on the day. Others include names like the iShares Semiconductor ETF (NASDAQ:SOXX), which is down 3.8%, SPDR S&P Semiconductor ETF (NYSEARCA:XSD) -3.8%, Invesco Dynamic Semiconductors ETF (PSI) -5.2%, and the triple leveraged Direxion Daily Semiconductor Bull 3 Shares (NYSEARCA:SOXL) -11.8%.
Year-to-date price action: SMH -38%, SOXX -39.2%, XSD -41.1%, PSI -40.7%, and SOXL -84%.
In related semiconductor news, Senate Minority Leader Mitch McConnell is threatening to block $52B in funding for the U.S. semiconductor industry if rival Democrats pursue a broad spending package.