Direxion Daily Semiconductors Bull 3x Shares (SOXL) plummeted 5.00% during intraday trading on Tuesday, reflecting significant downward pressure on the semiconductor sector.
The sharp decline in the leveraged semiconductor ETF appears to be driven by weakness in key component stocks, particularly Nvidia. According to market reports, Nvidia stock fell 2.9% amid confusing signals from OpenAI regarding its chip procurement strategy. As a major AI chip supplier and a significant holding in semiconductor indices, Nvidia's performance has an outsized impact on sector-tracking funds like SOXL.
The 3x leveraged structure of SOXL amplifies both gains and losses in the underlying semiconductor index, making it particularly sensitive to moves in major constituents like Nvidia. The decline suggests broader concerns about semiconductor demand and competitive dynamics in the AI chip market.