Semiconductor stocks are on the verge of a bear market. Is the thrill in the chips trade gone?

The article says semiconductor stocks are nearing bear-market territory after a sharp reversal from their late-June peak. The PHLX Semiconductor Sector Index fell 4.3% on Thursday and is now down 19% from its record high, leaving it just shy of the 20% decline that confirms a bear market. The pullback reflects investors rotating away from high-flying chip names and back into parts of the market tied more closely to a resilient economy, such as financials, transports, and retail. Despite the sector’s weakness, the broader market has not cracked: financials hit back-to-back records, transports are up more than 30% year to date, and retail stocks are near multi-year highs. The article frames the move as profit-taking and sector rotation rather than a definitive end to the AI-driven chip trade, but notes fatigue, lofty expectations, and upcoming megacap tech earnings could keep pressure on semis.