AI semiconductor market is in the mid-cycle of a 1995 bull run or the late stage of the 2000 bubble.

The Philadelphia Semiconductor Index SOX is in the overbought zone, and the ratio of SOX to Magnificent 7 has risen to its highest level since 2019. The Market Ear believes that the simultaneous rise in spot prices and volatility makes the structure fragile. Comparative analysis of the MSCI Global Semiconductor Equipment Index and the Nasdaq performance from 1996 to 2003 shows that the current market bears the hallmarks of both a bull market continuation and the latter stages of a bubble. The scale of Gamma rebalancing by South Korean leveraged and inverse ETF traders may exceed 20% of Kospi’s daily trading volume. There is a divergence between stock market and interest rate volatility, and the S&P 500 has not yet fully reflected the signal of decreasing bond volatility.