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CHIP STOCKS SHOWING SOME FAT GAINS

It may be early in 2026, but so far, chip stocks have been packing it on.

The PHLX Semiconductor Index .SOX has surged more than 14% so far this January, putting it on track for its biggest monthly gain since June of last year. The S&P 500 .SPX and Nasdaq Composite .IXIC are posting 1.9% and 2.5% rises so far this year.

It's also the best start to a year for the chip index since January 2023's 15.4% gain (the SOX advanced 65% for all of 2023).

Now in the wake of chip-maker Texas Instruments TXN.N forecasting Q1 revenue and profit above estimates, and chip-equipment maker ASML ASML.O posting robust Q4 orders, Wall Street semis are surging premarket on fresh optimism over the AI supercycle.

Ahead of the opening bell, the VanEck Semiconductor ETF SMH.O is higher by 3%.

Of note, the SOX index, which ended Tuesday at 8,117.18, posted a record closing high, though it failed to surpass its 8,188.16 January 22 record intraday peak.

Meanwhile, the index is attempting to break out above a monthly resistance parallel based on the support line from its 2008 low, which is now around 7,895, and will ascend to around 8,000 in February.

A January close above this hurdle can see the SOX focus on another monthly resistance parallel based on the support line from the 2016 trough, which will ascend to around 9,215 in February. That level is roughly 13.5% above Tuesday's close.

Ending January back below 7,895 would suggest a failed breakout attempt and could lead to a greater setback.

Within the SOX, the top three performers so far this year are Nova NVMI.O, Micron MU.O and Entegris ENTG.O. All three are up more than 40% each. Nvidia NVDA.O, up 1.1% YTD, is showing the smallest rise of the 24 index constituents in positive territory. Qualcomm QCOM.O, off 10.5%, is taking the biggest hit of the six losers.

Since early September of last year, the relative-strength trend has favored the SOX's chip equipment makers vs. its chip makers.

(Terence Gabriel)

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EARLIER ON LIVE MARKETS:

WHAT BUILDING A MINING SUPER-MAJOR TAKES CLICK HERE

SYMPATHY FOR THE DOLLAR CLICK HERE

EURO STRENGTH IS BACK, WHAT IT MEANS FOR EUROPE INC CLICK HERE

TECH UP, LUXURY DOWN CLICK HERE

BEFORE THE BELL: LOTS OF NEWS TO READ, START WITH ASML CLICK HERE

MORNING BID: TRUMP'S TALK DOWNS THE DOLLAR CLICK HERE

(Terence Gabriel is a Reuters market analyst. The views expressed are his own)