SOX hits record 14,462 as AI demand fuels Nasdaq rebound

The Philadelphia Semiconductor Index closed at a record 14,461.79 on Thursday, erasing a Fed selloff in 48 hours as AI spending bets drove chip demand.

"The speed of the reversal tells you the market looked at the Fed's hawkish hold and decided it did not change the trade," said James Hyerczyk, a technical analyst and author of two books on market analysis. "By Thursday's close, the semiconductor index was at records and the Fed meeting was already old news."

The Nasdaq Composite closed on the strong side of its short-term retracement zone between 26,085.30 and 26,346.05, with a push above the secondary lower-top at 26,788.62 opening a run at the record high of 27,190.21. The SOX posted both a record intraday high and record close, with the minor swing bottom at 13,291.75 serving as the key level to watch on any retreat. The 10-year Treasury yield pulled back during the session, supporting growth stocks, while the U.S. dollar index edged lower.

The rebound positions the Nasdaq for a test of its all-time high, but the next catalyst is earnings season. Companies building AI infrastructure must now prove that Thursday's record close in the SOX was justified. If revenue from AI spending disappoints at these valuations, sellers who could not gain traction last week are likely to return with more force.

Broadcom, one of the fastest-growing chipmakers in the AI market, reported AI chip sales surged 65% to $20 billion in fiscal 2025, accounting for 31% of its top line. The company expects that figure to reach at least $100 billion in fiscal 2027, according to its earnings report. Broadcom trades at 25 times next year's earnings, making it one of the cheapest mega-cap AI stocks relative to its growth rate.

The Philadelphia Fed Manufacturing Index rose to 10.3 in June from minus 0.4 in May, above the consensus estimate of 10, while initial jobless claims came in at 226,000, roughly in line with the 225,000 forecast. Intel jumped 11% after former President Donald Trump said Apple agreed to use Intel's foundry services for chip manufacturing, adding to the semiconductor sector's momentum.

WTI crude oil climbed above $76.00 a barrel as some traders bought the dip, while energy stocks remained under pressure despite the rebound in oil prices. The S&P 500 recovered toward the 7,540-7,550 resistance range, with the next upside target at 7,615-7,625.

48-Hour Reversal Erases Hawkish Fed Signal

The June 17 selloff looked justified when the Federal Reserve delivered a hawkish hold, keeping rates steady while suggesting potential hikes ahead. Growth stocks dropped into the close as it felt like the start of a broader reassessment. But the next day, money went straight back into the large-cap tech names that have carried the market all year. The SOX did not just recover from the dip — it ran to all-time highs 48 hours after the committee put rate hikes back on the table.

AI Spending Faces Earnings Season Test

Every piece of evidence last week pointed the same direction. The selloff was shallow, the reversal was fast, the leadership came from semiconductors, and the buying carried through to a record close. The committee's hawkish message ran into a market that has found something it cares about more than rates. Whether that lasts depends on what the next round of earnings shows. The companies writing the checks for AI infrastructure have to prove Thursday's record close was justified.

This article is for informational purposes only and does not constitute investment advice.