Direxion Daily Semiconductors Bear 3x Shares (SOXS) surged 11.27% in pre-market trading on Monday, as the leveraged inverse ETF benefited from a broad decline in semiconductor stocks.
The move comes as fears rose about potential disruption to the chip supply chain from conflict in the Middle East, threatening the manufacturing economics of energy-intensive semiconductor fabrication facilities. Fellow semiconductor companies, including Nvidia, Advanced Micro Devices, and Broadcom, were all trading lower in the premarket session.
Asian chipmakers, key suppliers to the industry, saw significant declines in local trading, with SK Hynix and Samsung Electronics falling 9.5% and 7.8% respectively. Analysts noted that any sustained increase in electricity or fuel prices due to the geopolitical situation could directly affect semiconductor manufacturing costs, weighing on the sector.
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