Chipmaker ETFs Get a Trading Spike as Industry Projections Weaken

(Bloomberg) -- Exchange-traded funds tracking chipmakers saw heavy trading volume Friday as some of the biggest semiconductor stocks continued to struggle amid earnings woes.

The $1.3 billion iShares PHLX Semiconductor ETF, ticker SOXX, saw close to 22,500 shares trade before the market opened, more than five times the average pre-session volume for the past year. Investors also were active in the $1.1 billion VanEck Vectors Semiconductor ETF, or SMH, which had more than twice the average pre-market volume for the past year.

Chipmaker ETFs Get a Trading Spike as Industry Projections Weaken

Chip companies are the worst performing group in the S&P 500 Index Friday afternoon, down 2 percent. The beating comes after Nvidia Corp. and Applied Materials Inc. issued disappointing revenue forecasts, adding to evidence that the industry’s half-decade bull run could be coming to a close. The group also is under pressure from the ongoing trade war between the U.S. and China.

“Investors were looking for hedges and protection early against semis with Nvidia and Applied Materials imploding overnight,” said Dave Lutz, managing director of JonesTrading.

Both SOXX and SMH fell more than 3.5 percent in early trading, before clawing back roughly half of the losses. In contrast, the Direxion Daily Semiconductors Bear 3x Shares ETF, or SOXS, which bets against chip stocks, climbed as much as 11 percent at the open with more than 81,000 shares trading before the session started, almost five times the average pre-market volume for the past year.

©2018 Bloomberg L.P.