Stock Track | SOXL Plunges 5.04% Intraday Amid Broad Semiconductor Selloff and Cooling AI Trade

Stock Track
Jul 16

The Direxion Daily Semiconductors Bull 3x Shares (SOXL) ETF fell 5.04% intraday on Thursday, reflecting a sharp downturn in the leveraged semiconductor sector.

The move coincided with a broad selloff in technology stocks, particularly semiconductors, across global markets. Fresh selling pressure in Asian markets reignited doubts about the sustainability of the AI-driven trading theme, with South Korean markets triggering circuit breakers amid heavy losses in chip stocks like SK Hynix and Samsung Electronics.

Market analysts note the AI trade that led markets higher has cooled since July, prompting profit-taking in richly valued technology stocks. As the earnings season approaches, investors are reassessing the return on investment from AI, leading to pronounced volatility in chip, memory, and AI infrastructure stocks. The leveraged nature of SOXL, often used for speculative, short-term bets on semiconductor swings, amplified the downward move during this period of sector-wide pressure and unwinding of speculative positions.

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