The VanEck Semiconductor ETF (SMH) closed at $569.77 on August 18, down 4.09% from its prior close of $594.07. The ETF still posted year-to-date gains of 64 to 65% as of mid-August, with total net assets near $71.5 billion. The decline occurred despite supportive macro conditions, as geopolitical tensions between the US and Iran eased and oil prices moved lower. In July, the Philadelphia Semiconductor Index had already lost 20 to 29% from its prior peaks, with aggregate market capitalization losses in the trillions. The partial rebound seen in mid-August followed by this new setback raises questions about the sustainability of the semiconductor sector’s historic rally.
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