Chip stocks lose a key support as the SOX slips below its 200-day average

The PHLX Semiconductor Index broke a closely watched trend line for the first time since May 2025 as doubts about AI spending deepen The semiconductor trade that powered the AI boom just lost one of its most watched safety nets. The PHLX Semiconductor Index, better known as the SOX, closed below its 200-day moving average on Friday. It is the first time that has happened since May 2025. What broke, and by how much The SOX tracks a basket of major chip designers, manufacturers and equipment makers. It has become shorthand for the AI hardware trade, since those are the companies supplying the processors and gear that fill data centers. The index now sits roughly 40% below its June 22 high, according to BTIG. That peak came in at 14,634. The move below the 200-day line came after a wave of broad selling. Semiconductor and AI names were hit especially hard as investors unwound positions that had been crowded for a long time. Why the 200-day line gets so much attention Think of the 200-day moving average as a stock’s long-term mood ring. It averages the closing prices over the last 200 trading sessions, which smooths out daily noise. When an asset trades above that line, traders general...