Chip stocks finally rebounded.
The Philadelphia Semiconductor Index (SOX) rose 1.6% to start the week, snapping an eight-session losing streak and its longest string of declines since October 2008, when it also fell eight days in a row.
Two of the most popular chip ETFs had it worse. VanEck’s SMH and iShares’ SOXX each fell nine straight sessions leading up to Monday.
The Nasdaq 100 also ticked up 1.2% to close 5.4% below its record from earlier in the month.
Indeed, streaks like this are rare. Since 1994, the SOX has fallen eight days in a row or more just eight times, counting this one.
Two of those reached nine days, and none reached 10.
Here’s what happened after the previous occurrences.
The SOX rose the next day all seven times, by a median of 1.4%
One month later, it was lower in five of the seven cases
The median one-month return was -5.2%, compared with +1.8% for any month since 1994. On a six-month outlook, the median gain was 2%, well below the 9.8% from any six-month stretch.
Monday fit the first part of that pattern. The rest of the tape looked shaky.
The SOX was up 3.7% at its high, then gave back more than half of that gain. It closed below where it opened.
That said, the bounce did at least look broad based. Of the index’s 30 stocks, 26 finished higher.
After Monday’s rebound, the SOX still sits 22.7% below its record high from June.
It’s true that seven episodes is a small sample, and the results are all over the place. After the July 1996 streak, the SOX gained 76% over the next six months. After the one that ended in May 2002, it lost 22%.
History doesn’t always forecast the future, but it does have a reliable track record of anticipating chop.
Elsewhere
📈 The 10-year Treasury yield is holding above 5%. Wholesale prices rose 6.3% from a year earlier in September, the biggest jump since 2022, and traders see an above-80% chance the Fed holds rates at its October 28 decision. (CNBC)
🚀 Elon Musk says he’ll give a SpaceX share to every child in America next year. With 72 million US children under 18 and SpaceX at $146 a share as of Friday, the gift would be worth about $10.5 billion. (CNBC)
🔔 The NYSE is extending options trading hours. Options on 29 major stocks and funds now trade from 7:30 to 9:25 AM ET and again from 4:00 to 4:15 PM ET, and the exchange plans to stretch trading in those names to 23 hours a day, five days a week, starting December 6. (CNBC)
Rapid-fire
Apple scheduled an October 28 launch event where analysts expect a touchscreen laptop (CNBC)
Intel rose after JPMorgan upgraded the chipmaker from underweight to neutral (Investopedia)
Gartner’s chief forecaster says AI returns don’t yet justify the neocloud build-out (CNBC)
Anthropic is AI trade’s last big hope for a major IPO this year (CNBC)
Cleveland-Cliffs soared 16% after forecasting 2027 EBITDA well above Wall Street estimates (Investopedia)
The S&P 500 has averaged a 0.9% gain in October since 1950 (Opening Bell Daily)
On this day
🗓 October 20, 1987: A day after Black Monday, the Federal Reserve affirmed its “readiness to serve as a source of liquidity to support the economic and financial system.” The S&P 500 rebounded 5.3% that session.
Last thing
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