To The Moon

Don’t get too caught up with $NVIDIA Corp(NVDA)$ —its stocks have begun to underperform compared to the market.

According to Bespoke Investment Group, despite Nvidia's recent surge, semiconductor stocks have still fallen short of the $S&P 500(.SPX)$ ’s performance this month.

On Wednesday, the S&P 500 gained 0.7%, closing at 5,792.04—an all-time high. Meanwhile, Nvidia’s stock dipped nearly 0.2% during the trading session, bringing its October gain down to 9.2%.

Bespoke pointed out that while Nvidia’s technical outlook may have improved, the overall semiconductor sector isn't showing strength. They noted that the $Philadelphia Semiconductor Index(SOX)$ faced resistance throughout the summer, despite managing to surpass the 50-day and 200-day moving averages.

Bespoke analyzed the semiconductor index, highlighting a more significant decline in September compared to August, with subsequent rebounds lacking momentum. On Wednesday, SOX rose 1.1%, and the $Invesco PHLX Semiconductor ETF(SOXQ)$ climbed by 1% as well.

Although the early September sell-off in the semiconductor sector wasn’t as severe as in August, the index has shown “higher lows,” which could be a positive sign, even though it hasn’t yet reached new highs.

On the same day, the $iShares Semiconductor ETF(SOXX)$ , which tracks U.S.-listed semiconductor stocks, also rose by 1%. While that ETF is up 2% in October so far, it’s down 9.4% over the past three months. In contrast, the S&P 500 has increased by 3.9% during the same period.

Overall, the U.S. stock market performed strongly on Wednesday, with the $DJIA(.DJI)$ rising 1% to reach a historic peak, and the tech-heavy $NASDAQ(.IXIC)$ up by 0.6%.

As of Wednesday, the S&P 500 has a cumulative gain of 21.4% so far in 2024, slightly trailing SOXX’s 22.5% year-to-date growth. This indicates that while the semiconductor sector started the year strong, its recent performance has shown signs of weakness.