VanEck’s semiconductor ETF fell 2% by late morning, while the iShares momentum ETF lagged and software stocks stayed slightly positive.
Surging bond yields drove the split: last week the Bloomberg long Treasury index lost 2.6%, its worst week in more than a year, as oil-supply worries, hot April producer prices and UK political turmoil hit bonds.
Since 2022, weeks when long-term bonds fall at least 0.5% have typically produced negative S&P 500 returns, with the Nasdaq 100 and momentum trades even more vulnerable.
Goldman Sachs strategists said momentum works best in periods of stasis; with 30-year Treasury yields back near the 5%-5.2% ceiling seen repeatedly over three years, semiconductors are now moving more like the market’s key duration risk.
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