Semiconductor shares retreated as investors took profits following an 82% gain for the sector in the first six months of 2026
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U.S. stocks fell Wednesday as semiconductor shares pulled back after a record-breaking first half of the year. Losses were spread across the major indexes, with the Dow Jones Industrial Average off 184 points, or 0.3%, the S&P 500 down 0.4%, and the Nasdaq $NDAQ Composite closing 0.6% lower.
The selloff came as investors took profits on semiconductor stocks after a strong six-month run. Going back to its May 2000 launch, the VanEck Semiconductor ETF had never posted a stronger opening six months than the 82% it returned in the first half of 2026.
The major indexes closed out the first half of 2026 with broad gains. For the full first half, the S&P 500 added 9.6% and the Nasdaq rose 12.8%, while the Dow's 8.9% advance was its strongest January-through-June showing in five years. The standout performer among the major benchmarks was the small-cap Russell 2000, which jumped nearly 22% — a first-half result not seen since 1991. Micron, Intel $INTC, and Advanced Micro Devices together saw their combined market capitalization grow by $2 trillion during a historic chip-stock run in the second quarter.
On CNBC's "Closing Bell: Overtime," Bespoke Investment Group co-founder Paul Hickey cautioned that chip stocks could be due for a pause despite his longer-term conviction in the sector. "Over the long term, we still like the semis, but I wouldn't be aggressive towards it here," he said. "So I think in that respect they've gotten a little bit…extended. So I would maybe take a breather here."
Traders also monitored remarks from Federal Reserve Chairman Kevin Warsh, who was speaking at a European Central Bank conference in Portugal. Questions about a potential rate move at the Fed's upcoming meeting went unanswered, though Warsh indicated that price pressures have moderated compared with conditions at the time of the last FOMC gathering. He also said that "we've seen that prices are too high."
Elsewhere in markets, U.S. Treasury yields ticked higher, gold fell below $4,000 a troy ounce at one point during the session, and oil prices slipped, with Brent crude trading below $73 a barrel.
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