Semiconductor Stocks Break Losing Streak: Why Chip Sector Rebounds After 7 Days of Losses

The US semiconductor sector ended a multi-day losing streak on August 25, 2026 with a broad recovery after the iShares Semiconductor ETF (SOXX) had plunged more than 2.5% the previous day. The Nasdaq led the recovery, while falling bond yields and a decline in crude oil prices supported sentiment.

Turnaround After Seven Trading Days in the Red

On August 24, 2026, semiconductor stocks dragged down the Nasdaq and S&P 500. The SOXX ETF lost more than 2.5%, with significant declines in Marvell Technology (MRVL), Intel (INTC), and Advanced Micro Devices (AMD). Samsung Electronics, a major position in the ETF, slumped nearly 9% in South Korean trading the same day.

One day later came the turnaround: On August 25, 2026, the major US indices closed higher, led by semiconductor stocks. The Dow Jones Industrial Average climbed 160.24 points (0.30%) to 53,577.40 and extended its winning streak to three trading days. The technology-heavy Nasdaq Composite led the gains.

Individual Stocks: Nvidia Gains Over 2%

Winners on August 25 and 26, 2026 included:

• Nvidia (NVDA): +2.16%
• Goldman Sachs (GS): +2.20%
• IBM (IBM): +1.41%
• Cisco Systems (CSCO): +0.80%

On the losing side were Walmart (WMT, -1.05%), Chevron (CVX, -1.61%), and McDonald's (MCD, -1.61%).

Falling Yields and Oil Prices Support Recovery

The recovery was driven by declining US Treasury bond yields and a sharp decline in crude oil prices. However, weaker consumer sentiment data and escalating trade tensions between the US and Canada dampened market sentiment.

Market participants also awaited the PCE Price Index (Personal Consumption Expenditures), scheduled to be released on August 28, 2026. Economists expected the inflation indicator to rise 3.6% over twelve months through July 2026, down from 3.7% in June 2026. The core rate excluding food and energy was expected to remain flat at 3.3%. These data were considered an important factor for the US Federal Reserve's interest rate decision in December 2026.

Dramatic Recovery Following Historic July Collapse

The price recovery in August 2026 followed a dramatic collapse the previous month. In July 2026, semiconductor stocks lost more than $1 billion in market value. The Philadelphia Semiconductor Index (SOX) – which tracks the 30 largest US-traded chip companies – plunged nearly 20% in July 2026, despite rising 92% over the preceding 12 months.

According to reports from August 14, 2026, July 2026 was the worst monthly performance for the semiconductor sector since the 2008 financial crisis. SanDisk Corp. lost nearly half its value in July 2026 after the stock had surged 858% in the first half of 2026.

Strongest August Since 2003

Despite the July collapse, the semiconductor sector was on track for its strongest August since 2003 by mid-August 2026. Analysts spoke of one of the more dramatic turns in recent market history.

Fundamentals supported this recovery: Global semiconductor sales posted their 15th consecutive monthly record, according to reports from August 1, 2026 – despite the weakness in stock prices during July 2026. Analysts interpreted this discrepancy between record sales and stock losses as a potential buying opportunity.

Central Bank in Focus

Fed Chair Kevin Warsh had criticized the PCE Index for not adequately reflecting inflation and initiated a review of inflation measurement. The next Federal Open Market Committee (FOMC) meeting was scheduled for December 2026. Policymakers were closely monitoring inflation data to determine whether further rate increases were necessary – inflation had remained above the Fed's 2% annual target since 2021.