SOXS jumped 9% Monday on a chip selloff but sits down 92% year-to-date, a victim of compounding decay inside its daily-reset leverage structure.
AMD and NVIDIA each dropped roughly 4% after a Korean brokerage downgraded SK Hynix on fixed-price HBM contract concerns, sparking broad chip profit-taking.
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The Direxion Daily Semiconductor Bear 3X Shares (NYSEARCA:SOXS) jumped 8.95% on Monday, closing at $4.45, as the largest names in the chip complex reversed sharply. SOXS is an inverse-leveraged product designed to deliver roughly three times the daily opposite move of its semiconductor benchmark, so a red day for chips is a green day for SOXS. Today qualified.
The session's trigger came from Asia. According to reporting compiled by StockStory, a South Korean brokerage lowered its Q2 earnings forecast for SK Hynix, citing the memory maker's reliance on fixed-price high-bandwidth memory (HBM) contracts. That downgrade rippled through the memory chain and, by extension, the broader semiconductor sector. "A lowered Q2 earnings forecast for SK Hynix, driven by its reliance on fixed-price HBM contracts, also contributed to the selloff across memory stocks," the report noted, which then bled into logic and equipment names as investors reassessed the durability of AI capex.
Layered on top were renewed Middle East headlines. TradingView cited "escalating Middle East tensions" and noted that "Renewed Middle East tensions also pushed oil prices higher, encouraging a shift to safer assets." That risk-off tone hit the market's most crowded trade: AI-linked semiconductors. Profit-taking finished the job. Reporting flagged that shares of Marvell Technology, Vishay Intertechnology, and Allegro MicroSystems fell in afternoon trading due to profit-taking in the semiconductor sector, with equipment names like Lam Research (down 5.83%) and Texas Instruments (down 3.93%) among the day's laggards.
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On the SK Hynix paradox specifically: shares plunged in Korea despite a strong Nasdaq debut, and the reporting attributes that gap primarily to the HBM pricing/contract concern flagged by the local brokerage downgrade. This triggered a reassessment of the sector, which was already facing questions about the durability of AI capital spending.
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