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Need to Know
How the chip trade has come to resemble silver — a warning from Morgan Stanley’s Wilson
Veteran Wall Street strategist Mike Wilson weighs possibility that semiconductors are merely ‘the latest commodity to boom this year’
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Updated June 29, 2026, 9:30 a.m. ET
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The Nasdaq Composite
has just registered a five-day losing streak, its longest such retreat since the start of the year, shedding 4.6% of its value in the process.
The tech-heavy index’s fall is more than double that of the broader S&P 500
over the same period, and that speaks to two things: caution over the artificial-intelligence trade and a broadening of the market as investors shift funds into sectors deemed more economy-sensitive.
Many investors in recent years have benefited handsomely from buying such a tech dip. But they may need to be much more selective this time, according to a team of strategists at Morgan Stanley led by Mike Wilson.
That’s partly because he thinks the broadening trade has further to run, “driven by an underappreciated recovery in earnings across the market.”
He favors discretionary goods, transports and regional banks, amid falling oil prices and the likelihood that the Federal Reserve will be less hawkish than the market currently thinks.
But another concern for Wilson is that recent volatility in semiconductors “is making historically high exposure levels in the space harder to maintain.”
As an illustration of that volatility, the PHLX Semiconductor Index
lost 7.9% last week, having jumped 7.3% the week before that.
See: It’s a tale of two S&P 500s as rotation out of top tech stocks shifts into overdrive
Wilson points to weakness in shares of hyperscalers of late and heightened earnings optimism as headwinds for the semiconductor group.
“In our view, this rotation away from the hyperscalers may be a leading indication that semis (key spending beneficiaries [of hyperscalers]) could now see a period of underperformance as earnings per share revisions breadth for the space comes up against historical extremes,” says Wilson.
And he also sees semis as possibly “the latest commodity to boom this year,” drawing what for bulls may be a worrying comparison to the performance of silver stocks — though with a four-month lag.
“If the broadening out is making a sustainable comeback, this price momentum in semis stocks likely needs to reach a climax, and it appears that may be happening, on schedule,” Wilson says.
“This doesn’t mean the cycle [for semiconductors] is over … though a lack of price momentum in the space for now is likely to give other areas of the market room to outperform as relative tailwinds drive groups like discretionary and transports,” he concludes.
The markets
U.S. stock-indices
are higher at the opening bell on Wall Street as Treasury yields
rise. The dollar index
is a tad lower, as oil futures
climb and gold futures
trade around $4,060 an ounce.
| Key asset performance | Last | 5d | 1m | YTD | 1y |
| S&P 500 | 7354.02 | -1.95% | -2.98% | 7.43% | 19.13% |
| Nasdaq Composite | 25,297.62 | -4.60% | -6.21% | 8.84% | 24.78% |
| 10-year Treasury | 4.391 | -12.50 | -6.20 | 21.90 | 16.30 |
| Gold | 4053.5 | -3.71% | -10.22% | -6.43% | 22.28% |
| Oil | 70.42 | -4.94% | -23.85% | 22.66% | 8.39% |
| Data: MarketWatch. Treasury yields change expressed in basis points |
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The buzz
The U.S. and Iran reportedly agreed to halt attacks after repeatedly exchanging fire in the Persian Gulf over the weekend.
Apple
is lobbying the Trump administration for clearance to buy memory chips from a blacklisted Chinese company, according to the Financial Times.
Shares in Comcast
are up about 20% after the media group said it would spin off NBCUniversal and Sky as separate companies.
Samsung Electronics
and SK Hynix
will invest more than $500 billionto expand memory-chip production.
A holiday-shortened week — Independence Day is on Friday — will see the nonfarm-payrolls report brought forward to Thursday, while the earnings highlight is likely to be from Nike
after Tuesday’s market close.
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The chart
The swift pullback in the price of West Texas Intermediate crude
has pushed it to oversold levels, according to Matt Maley, chief market strategist at Miller Tabak. The “over-hated commodity should be due for some sort of bounce soon,” he says. Any rebound in oil prices may increase concerns about inflation which may hit Treasury prices and raise yields, Maley thinks. “So, like equity investors today, fixed income investors will want to stay very nimble in the days and weeks ahead.”
Top tickers
Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern.
| Ticker | Security name |
| SPCX<br><br>+1.15% | Space Exploration Technologies |
| NVDA<br><br>+0.88% | Nvidia |
| MU<br><br>-6.95% | Micron Technology |
| TSLA<br><br>+4.15% | Tesla |
| MSFT<br><br>+0.86% | Microsoft |
| GME<br><br>+0.92% | GameStop |
| TSM<br><br>+1.66% | Taiwan Semiconductor Manufacturing |
| AMD<br><br>-2.66% | Advanced Micro Devices |
| AAPL<br><br>-0.55% | Apple |
| PLTR<br><br>+5.04% | Palantir Technologies |
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About the Author
Jamie Chisholm is a markets reporter for MarketWatch based in London.
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