BlockBeats News, July 18th, BTIG's Chief Market Technician Jonathan Krinsky stated that the biggest risk in the current market is not a single negative event, but investors starting to question the previously unquestioned market logic.

Krinsky believes that the Philadelphia Semiconductor Index has retraced about 20% from its June high, entering bear market territory, the South Korean KOSPI Index has dropped more than 25%, and the Nikkei 225 Index has also experienced a technical pullback, reflecting pressure on global tech stocks.

He warned that the U.S. stock market may see a significant correction similar to the summer of 2024, with the S&P 500 Index at risk of falling below the 200-day moving average (6,983 points). If this scenario unfolds, the semiconductor sector may continue to weaken, and mega-cap tech stocks like the "Big Seven" may also end their previous leadership, dragging down overall market performance.

What is perhaps more concerning about this selloff is that it indeed lacks a clear catalyst. While a series of issues can be pointed out, including concerns about the rapid gains in the chip sector in the first half of the year, large tech companies borrowing heavily for massive capital expenditure plans, and the uncertain economic backdrop under the new Fed policy. This helps explain the rotation happening in the broader market currently; however, the weakness that the stock market can tolerate in its largest, hottest stocks (such as chip stocks) is limited and may eventually become unsustainable.