Weekly Commentary: Our Semiquincentennial Gilded Age

2026-07-04 10:10:32 ET

The Semiconductor Index (SOX) returned 88% during Q2, true to 2026's "Expect the Unbelievable" theme. Micron surged 242%, Intel 216%, and Advanced Micro Devices 186%. Other SOX super winners included Astera Labs (341%), Marvell Technology (201%), Credo Technology Group (190%), ARM Holdings (134%), Applied Materials (112%), KLA (105%), and Lam Research (103%).

June 30 - Bloomberg (Ryan Vlastelica): "Chip stocks posted their best quarter ever, extending an extraordinary start to the year driven by insatiable demand for artificial intelligence equipment... 'The story of the past six months is the market going all-in on AI infrastructure, but now people are asking if this is sustainable and if we should be worried,' said CJ Muse, senior managing director… at Cantor Fitzgerald. The Philadelphia Stock Exchange Semiconductor Index jumped 3.9% on Tuesday to bring its second-quarter gain to 88%, its best quarter ever. It soared 101% in the first half, putting it on track for its best year in its history."

Historic loose conditions and a mania wouldn't let a pesky war, Strait of Hormuz closing, inflation scare, and backup in bond yields interrupt the party. The S&P 500 returned 15.2% during the quarter, the Nasdaq 100 27.7%, and the MAG 7 Index 11.7%. The small cap Russell 2000 returned 21.6%. The KBW Bank Index returned 18.2%, with the Broker/Dealers returning 10.1%. Indicative of late-cycle "blow off" market dislocation dynamics, the Goldman Sachs Most Short Index surged 35.4%....

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