You wouldn’t know it by looking at the broader market, but chipmakers are facing tough times. The VanEck Semiconductor ETF (SMH) has fallen nearly 8% over the past week. Shares fell another 2% in Tuesday’s premarket as memory chip giant Samsung’s mixed quarterly report prompted investors to reduce exposure to artificial intelligence trading. Micron, along with SanDisk, fell 6%. Despite the selloff in semis, S&P 500 futures were only slightly lower heading into Tuesday’s rally. Meanwhile, the Dow Jones Industrial Average posted solid gains in early trading. The reason may be that investors did not withdraw completely, but simply transferred funds from one part of the stock market to another. “I think it’s kind of a rotation, and that’s why it continues to keep volatility at this index level pretty contained,” Amy Wu Silverman, head of derivatives strategy at RBC Capital Markets, told CNBC’s “Squawk Box” in an interview Tuesday. The CBOE Volatility Index (VIX), known as Wall Street’s fear gauge, traded around 16 on the day. A 20 handle on the VIX tends to indicate high volatility for investors. “For example, if you look at half-yearly implied volatility or implied volatility of individual stocks, (it’s) very large and historically high. You don’t know that because you get zigs and zags that cancel out. But if you’re working on specific places on a sector basis, that doesn’t help,” she said. “I think the market is really looking for new leadership right now, and we’re hopeful that that new leadership will mean market expansion,” Silverman said. That new leadership may be taking shape in so-called old economy stocks. Let’s take a look at the Dow Jones Industrial Average. The 30-stock average hit a new record high, topping $53,000 for the first time on Monday. On the other hand, semi-stock stocks are sluggish.
