Semiconductors Dominate: Now 12.1% of the S&P 500 – The Tech Takeover Is Here

The chips are up—way up. Semiconductors now command a staggering 12.1% slice of the S&P 500, cementing their role as the backbone of modern markets. Forget 'old economy' stocks—today's wealth is built on silicon.

Why it matters: When tech bellwethers sneeze, the entire index catches a cold. This concentration risk would give even Gordon Gekko pause—but hey, who needs diversification when AI keeps printing money?

The cynical take: Wall Street analysts will still find a way to call this 'healthy growth' while quietly updating their disaster recovery plans. Meanwhile, your 401(k) is basically a TSMC fan club membership.

Nvidia holds the chip market crown

As per the data, Nvidia has added $1.42 trillion in value since its April low. It has now surged 63% in just under three months. Meanwhile, the broader semiconductor index, $SOX, is up 111% over the past three years. It has even outpaced the S&P 500’s gain of 61%. In June alone, chip stocks have already led the S&P 500 with nearly 15% gains, crushing every other industry.

Nvidia shattered its own record, trading over $155.5 on Thursday and officially flexing past its January high of $149.43. As the chipmaker basked in the AI glow, the broader chip sector followed it. Companies like Marvell Technology surged 5%, Credo and Allegro climbed 2% while Astera Labs rocketed 8%. 

US semiconductor stocks have never been bigger:

The Semiconductor sector now reflects a record 12.1% of the S&P 500’s total market value.

This share has DOUBLED over the last 3 years, as semiconductor stock prices have skyrocketed.

During this time, the semiconductor index,… pic.twitter.com/zTB59pgBRN

— The Kobeissi Letter (@KobeissiLetter) June 26, 2025

Despite reporting a solid quarter, Micron slipped 1.4%. However, its stock has nearly doubled since April’s lows and is trading at $125.15 at the press time.

But while Wall Street’s riding the silicon wave, TRUMP is playing monetary chess with the Fed. Reports suggest that he’s privately considering replacing Jerome Powell before his term ends in 2026. He believes that the current Fed is moving too slowly on rate cuts. This speculation has already shifted the market odds as traders now give a 25% chance of a July rate cut, up from just 12.5% last week. 

China bets on Gold as tariff risks rise

Trump’s ticking tariff time bomb remains, as the 90-day pause ends in 13 days, on July 9. If all remains the same, the tariffs on EU imports might hit 50%, for China it’ll be 30% while there is a global 10% baseline in effect. On the market side, the S&P 500 is up ~1,200 points since the pause was announced. 

And while the US flexes tariffs and stumbles on recession, China is following a different financial playbook. The dollar’s share of China’s FX reserves has dropped to just 22% and is at its lowest in the last 15 years. Meanwhile, gold’s price has doubled to a record 6.8%. Since 2022, China has bought 200 tonnes of gold, hinting at the de-dollarization theory.

While the biggest crypto, Bitcoin, is on a roll, the AI-linked cryptos haven’t performed much. The biggest 5 AI cryptos are printing red index on every metric. Bittensor (TAO) price is down by 29% over the last 30 days and is trading at $320 at the press time. NEAR Protocol (NEAR) has performed in a similar trend and is down by 30% in the same period.

The cumulative AI crypto market cap dropped by 3% in the last 24 hours to stand at $27.08 billion. Bitcoin is trading high on an adoption rally, trading at an average price of $107,409 at the press time. It is just shy by 4.1% of its all-time high of $111,900.

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