Tech Stock Volatility Hits 23-Year High as Nasdaq Swings Outpace S&P 500
Technology stocks are experiencing one of their most volatile periods in more than two decades, with options markets pricing significantly larger swings in the Nasdaq 100 than in the broader S&P 500.
Tech Volatility Hits 23-Year High
According to Bloomberg data highlighted by market commentator The Kobeissi Letter, the ratio of the Nasdaq 100 Volatility Index (VXN) to the CBOE Volatility Index (VIX) climbed to 1.7 points, its highest level in 23 years and the first time it has exceeded 1.5 since 2018.
That ratio is now above its peak during the 2008 financial crisis, when it reached about 1.6 points.
The VXN stood at 28 versus 16 for the VIX, while remaining above 20 for five consecutive months, its longest streak since the 2022 bear market.
Technology and Semiconductor ETFs in Focus
Invesco QQQ Trust Series 1 (NASDAQ:QQQ), which tracks the Nasdaq 100, has $487.98 billion in assets and charges an expense ratio of 0.18%. The fund has returned 16.04% year-to-date and 27.90% over the past year.
Vanguard Information Tech ETF (NYSE:VGT) provides exposure to large-cap technology companies including Apple Inc. (NASDAQ:AAPL), Nvidia Corp. (NASDAQ:NVDA), Microsoft Corp. (NASDAQ:MSFT), Broadcom Inc. (NASDAQ:AVGO) and Advanced Micro Devices Inc. (NASDAQ:AMD). The fund manages $74.40 billion in assets, charges an expense ratio of 0.10%, and has returned 22.19% year-to-date and 36.47% over the past year.
State Street Technology Select Sector SPDR ETF (NYSE:XLK) has $94.34 billion in assets and charges an expense ratio of 0.08%. The fund has gained 25.71% so far this year and 40.71% over the past year.
VanEck Semiconductor ETF (NASDAQ:SMH) holds NVIDIA, Broadcom, AMD, Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM), and Micron Technology Inc. (NASDAQ:MU). It has $68.80 billion in assets under management and charges an expense ratio of 0.35%. It has returned 58.85% year-to-date and 107.76% over the past year.
The iShares PHLX SOX Semiconductor Sector Index Fund (NASDAQ:SOXX) provides exposure to the big chipmakers and manages $43.22 billion in assets. The fund charges an expense ratio of 0.34% and has gained 79.17% year to date and 130.23% over the past year.
Other ETFs tracking the technology stocks are iShares U.S. Technology ETF (NYSE:IYW) and Direxion Daily Semiconductor Bull 3X ETF (NYSE:SOXL).
Technology Funds Attract Record Inflows
Technology stocks continue to attract investor capital despite rising volatility.
According to the Bank of America Global Research data, U.S. technology funds drew $14.3 billion in the week ended July 1, the second-largest weekly inflow on record.
Price Action: Invesco QQQ Trust closed 0.28% on Wednesday at $711.44 and rose a further 0.11% in extended trading.
Benzinga edge rankings indicate QQQ has a Momentum score in the 78th percentile and a negative price trend in the short term, while it has a positive price trend in the medium and long term.
Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.
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