Semiconductor stocks paused after weeks of explosive gains, with traders taking profits ahead of Nvidia earnings. Leveraged chip funds suffered their biggest drop since the rally began in late March, while momentum indicators showed weakening strength. However, technical signals still suggest the rally could restart quickly if earnings or guidance surprise to the upside.
Concerns increased after comments from a former Samsung executive suggested China is rapidly expanding memory production capacity. Investors also reacted to remarks from Seagate that building new factories and equipment would take years, implying current demand may not last beyond the next few years. These developments raised fears that memory prices could eventually fall as supply catches up with demand.
Markets are now focused on upcoming results from $NVDA, which could determine the next direction for semiconductor shares. Traders are also watching developments involving AI chips, custom silicon competition, and future product launches. Other major semiconductor names attracting attention include $MU, $AMAT, and $QCOM. Outside technology, $HD reported earnings slightly above expectations but offered cautious guidance for the year. Meanwhile, easing tensions around Iran helped stocks rebound while oil prices and Treasury yields moved lower. Investors remain cautious because volatility could increase sharply after earnings announcements
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