Semiconductors (SMH) vs Technology (XLK)
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
SMH and XLK have overlapping components (Nvidia, Broadcom) but SMH is pure semis while XLK includes Apple, Microsoft, Oracle, and Salesforce. When SMH leads XLK, chips and AI infrastructure are driving tech. When XLK leads SMH, software, platforms, and services are taking the baton, which typically happens later in AI monetization cycles.
Cross-Asset Analysis
Semiconductors (SMH) captures vanEck Semiconductor ETF, leads the tech cycle, whereas Technology (XLK) reflects technology Select Sector SPDR Fund, and the difference between how they move is what the ratio pair relationship is really about. Flow-driven distortions in Semiconductors (SMH) or Technology (XLK), particularly from index inclusion effects or ETF concentration, can push the spread away from macro fair value. Sector ratios are among the most durable signals in equity markets, and Semiconductors (SMH) versus Technology (XLK) encodes a specific rotation theme that recurs across economic cycles.
Fed policy shifts that affect Semiconductors (SMH) or Technology (XLK) disproportionately can distort the ratio temporarily relative to fundamentals. Sector rotation strategies trade the Semiconductors (SMH)-Technology (XLK) ratio directly, either through ETF pairs or concentrated security selection within each sector. Semiconductors (SMH) and Technology (XLK) respond to different underlying conditions, and watching the ratio between them is equivalent to watching the underlying macro factor directly.
Tactical allocators use ratio momentum and mean reversion together on the Semiconductors (SMH)-Technology (XLK) pair, recognizing that trends persist but also in due course reverse. Global factors, including foreign demand for US equities or sector-specific geopolitical risk, can overwhelm the domestic macro story embedded in the Semiconductors (SMH)-Technology (XLK) ratio.
90-Day Statistics
No data available
No data available
Explore Each Metric
Related Scenarios & Forecasts
Get daily macro analysis comparing key metrics delivered to your inbox. Stay ahead of market-moving divergences.
Frequently Asked Questions
What is the relationship between Semiconductors (SMH) and Technology (XLK)?+
Semiconductors (SMH) and Technology (XLK) are connected through sector-specific sensitivities to macro variables. When the relevant macro factor shifts, both respond, though with different sensitivities and at different speeds. The spread between Semiconductors (SMH) and Technology (XLK) captures the specific macro signal that flows through this relationship.
When does Semiconductors (SMH) typically lead Technology (XLK)?+
Semiconductors (SMH) tends to lead Technology (XLK) during macro regime shifts that favor one sector over the other. In those periods, moves in Semiconductors (SMH) precede corresponding moves in Technology (XLK) by days to weeks, depending on the transmission channel and the depth of each market.
How are Semiconductors (SMH) and Technology (XLK) historically correlated?+
Long-run correlation between Semiconductors (SMH) and Technology (XLK) varies by regime. Sector pairs show persistent rotation patterns driven by macro regime, with correlation positive on direction but wide on magnitude. The correlation is not stable: it shifts with macro conditions, and the periods when it breaks down are often the most informative moments in the Semiconductors (SMH)-Technology (XLK) relationship.
What macro conditions drive divergence between Semiconductors (SMH) and Technology (XLK)?+
Divergence between Semiconductors (SMH) and Technology (XLK) typically arises from sector composition changes, sector-specific Fed policy effects, or foreign capital flow shifts. When one asset's idiosyncratic drivers dominate, the spread moves in ways that the common macro story does not predict, which is usually a signal to look more carefully at the specific drivers at work in Semiconductors (SMH) or Technology (XLK).
Is Semiconductors (SMH) a hedge for Technology (XLK)?+
Sector pairs including Semiconductors (SMH) and Technology (XLK) are rotation trades, not hedges; both can fall together in a broad market decline. Effective hedging requires matching the hedge to the specific risk being protected, and the Semiconductors (SMH)-Technology (XLK) pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
Related Comparisons
Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.