VanEck Semiconductor ETF Sheds Up to 6% as Weak Jobs Report and Short-Seller Bets Jolt the AI Trade

The chip ETF fell up to 6% after a weak US jobs report and hawkish Fed remarks, with heavy losses in Micron, Intel, and AMD. Oversupply warnings from Meta and short bets by Michael Burry add to the rout.

The VanEck Semiconductor UCITS ETF suffered a sharp reversal on Thursday, with price data diverging between sources as the fund tumbled between 4.03% and 5.98%. One feed put the closing price at 99.81 euros, while another registered a deeper slide to 97.89 euros. The selloff came just two days after the ETF had set a new 52-week high at 111.18 euros, marking a retreat of roughly 10% from that peak.

The catalyst was a disappointing US jobs report. Only 57,000 new positions were created in June, well below the 110,000 analysts had forecast. The unemployment rate climbed to 4.2%. The weak data triggered a rotation out of high-flying technology names into defensive sectors such as healthcare, utilities, and consumer staples. Adding to the pressure, remarks from Federal Reserve official Warsh at the EZB Forum were interpreted as hawkish, stoking volatility. The annualized volatility in the chip ETF surged past 61%, three times that of the broader equity market.

The rout hit the fund’s heavyweight positions especially hard. Micron Technology lost as much as 11% during the session, as investors grew nervous about falling memory demand. Intel and AMD each dropped up to 9%, while equipment makers Applied Materials and Lam Research also sank deep into negative territory. Market observers pointed to a potential oversupply warning: Meta is reportedly looking to sell excess AI computing capacity, a move Saxo analysts described as an early caution sign. That concern rippled into Asian names such as SK Hynix and Samsung.

The ETF’s concentrated structure amplified the move. The fund weights stocks by market capitalization, giving Nvidia an 18% slot. Together, the six largest holdings — including TSMC and Broadcom — account for 55% of assets. When these mega-caps stumble, the entire portfolio feels the jolt. Short sellers are betting on further weakness. Michael Burry has built short positions against semiconductor indices and individual names like Nvidia, while JPMorgan warns that positioning in AI momentum stocks is the most lopsided seen in 30 years, raising the risk of automated panic selling.

Technical indicators point to a cooling market. The 14-day relative strength index has fallen from overbought territory to a neutral 48 to 49.9, depending on the data source. The ETF remains roughly 50% above its 200-day moving average, which sits at around 65.27 to 65.28 euros — a level that, if breached, could trigger a rapid revaluation of the entire chip rally. Despite the pullback, the fund still shows impressive long-term gains: year-to-date returns range from 78% to 82%, and the 12-month advance stands at approximately 148%.

Looking ahead, the direction of the selloff may hinge on upcoming earnings from the AI heavyweights. Stabilization in memory prices and concrete capital spending plans from major cloud providers could stem the outflow. While the current decline feels violent, many market participants view it as a healthy correction in an otherwise intact long-term uptrend. The ETF currently trades about 7% above its 50-day moving average, leaving room for further consolidation before the next leg higher.