MW There's never been a semiconductor rally like this one - and that's triggering a number of warnings
By Jamie Chisholm
Parabolic moves 'only end one way,' says BTIG's Jonathan Krinsky.
Warning. The SOX index is at its most overbought in more than eight years.
U.S. stocks come to the end of a week in which they registered another record high, with the S&P 500 SPX now having bounced 12% from the March 30 trough.
In the vanguard of the latest bull stampede is the semiconductor sector, which is due to get another lift Friday as Intel shares have a big post-earnings pop.
But for some market observers, even those who buy in to the longer-term promise of the AI narrative, the latest leg-up, for the chip sector in particular, is all a bit too much.
Jonathan Krinsky, technical guru at BTIG, admits that he has been caught out by the continued strength in the PHLX Semiconductor Index, known by its ticker SOX. Along with Intel $(INTC)$, the index includes the likes of Nvidia (NVDA), Broadcom $(AVGO)$, Taiwan Semiconductor Manufacturing $(TSM)$, Micron $(MU)$ and Advanced Micro Devices $(AMD)$.
"We'll own it: we've been on the wrong side of semis. We thought the leadership was stretched and due to fade-yet strength has only intensified," says Krinsky in a note published Thursday afternoon.
And intensified it certainly has. The SOX SOX on Thursday registered a record 17-day winning streak in which it jumped 41%. It's the biggest 17-day rate of change since the index bounced out of the Oct. 2002 bottom, which came after an 80% bear market, according to Krinsky.
"So this is the biggest such move into a new high in the history of the semiconductor index" he adds.
This astonishing rally has triggered a number of technical indicators to flash red. Krinsky notes that the SOX now sits more than 40% above its 200-day moving average, which is the widest gap since June 2000.
Krinsky adds that the SOX's gap with its 200-day average did, in March 2000, exceed 100%, "but that was largely considered the biggest bubble in the modern era," he says. "Outside of that we are in extreme/unsustainable territory."
Unsurprisingly, such moves have pushed the SOX's 14-day relative strength index - a momentum gauge for which any figure above 70 is considered to be in overbought territory - to 81.98. MarketWatch calculations using FactSet data show that to be the highest RSI since November 2017.
The SOX's stampede is a key component of the momentum trade's resurgence , Krinsky argues, referring to a strategy of adding to stocks which already have strong upward price trends. The Goldman Sachs High Beta Momentum Long Index has just had its second biggest 18-day run in its history, he says.
"Much of this can be attributed to semis, but there are also electronic components, optical, data center, and infrastructure. In other words, a pretty broad based AI basket," Krinsky adds.
He reckons that whether one does or does not consider the market to be showing bubble characteristics, the recent surge in momentum plays "is textbook parabolic price action." He points to the recent spike and dive for Avis Budget $(CAR)$ as proof that "parabolas only end one way: in equal and opposite fashion."
A final point. We should remember that overbought RSIs are useful as indicators of a short-term pullback and don't necessarily mean the longer term trend is at an end. Indeed, an AI-assisted data crunch by MarketWatch showed that in the 34 times the RSI of SOX was over 80, the average 12-month return for the index was 22%.
The markets
U.S. stock-index futures (ES00) (YM00) (NQ00) are mixed as benchmark Treasury yields BX:TMUBMUSD10Y nudge higher. The dollar index DXY is little changed, while oil prices (CL.1) rise and gold futures (GC00) are trading around $4,700 an ounce.
Key asset performance Last 5d 1m YTD 1y S&P 500 7108.4 0.95% 9.75% 3.84% 29.60% Nasdaq Composite 24,438.50 1.39% 14.16% 5.15% 42.37% 10-year Treasury 4.337 8.60 -10.10 16.50 9.70 Gold 4700.4 -3.07% 4.69% 8.50% 41.14% Oil 97.53 16.11% -3.61% 69.88% 54.37% Data: MarketWatch. Treasury yields change expressed in basis points
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The buzz
Tech job losses are accelerating, with Meta $(META)$ saying it will lay off 10,000 workers and Microsoft $(MSFT)$ offering redundancy buyouts to about 7% of its U.S. workforce.
Intel shares (INTC) are jumping to a record high after the chipmaker delivered better-than-expected earnings and forecast strong AI-linked demand.
Companies reporting earnings on Friday include Procter & Gamble $(PG)$ and SLB $(SLB)$.
A U.S. special forces operative has been charged with using classified information to reap more than $400,000 from bets on the ouster of former Venezuelan President Maduro.
U.S. economic data due Friday include the final reading of April consumer confidence, released at 10:00 a.m. Eastern.
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The chart
It seems retail traders have become much more skeptical of the short-squeeze meme-stock narrative. The chart from Vanda Research shows that for much of the spike and tumble in Avis Budget stock (CAR), retail investors were huge net sellers - though many poor souls did still buy at the peak above $800. "The lack of strong retail participation may be a key reason why CAR has reversed sharply - and why we've not seen a GME-like moment for this stock," said Vanda, referring to original meme stock, GameStop $(GME)$.
Top tickers
Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern.
Ticker Security name INTC Intel TSLA Tesla NVDA Nvidia INFY Infosys AMD Advanced Micro Devices AMZN Amazon.com TSM Taiwan Semiconductor Manufacturing MSFT Microsoft PLTR Palantir Technologies AAPL Apple
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Beyond the newsroom
MarketWatch Picks: 3 checking accounts offering 7% and up - plus 7 more of the highest APYs of April 2026.
-Jamie Chisholm
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April 24, 2026 06:53 ET (10:53 GMT)
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