Market "last line of defense" is weakening! Analysts: Weakness in the semiconductor sector may trigger a greater adjustment in the US stock market.

At a time when the technology sector as a whole is under pressure, the semiconductor sector, which has been an important force supporting the market, is showing signs of weakness, which may pose new downside risks to the overall market. Analysts point out that once the semiconductor stocks lose their leadership position, the technology sector and even the broader market may face more significant adjustment pressure. From a technical perspective, the VanEck Semiconductor Index ETF (SMH.US), which tracks the performance of the semiconductor sector, has recently been repeatedly blocked at the key level of $400 and gradually formed a typical "head and shoulders" pattern on the right side. At the same time, the Relative Strength Index (RSI) has shown a "peak divergence" since the beginning of this year, indicating that the price has hit a new high but the momentum is weakening, showing that the uptrend is diminishing. If it breaks below the key support level of $375 in the future, the ETF may further decline to the $325 area. The fund traded around $382 on Thursday. As for the leading stocks, NVIDIA Corporation (NVDA.US) has still recorded a gain of about 52% over the past year, but has fallen about 7% since the beginning of this year, nearly 19% below its 52-week high. Technically, the stock has fallen below the 50-day and 200-day moving averages and formed a descending triangle consolidation pattern. Analysts believe that if the stock price falls below the key support level of $170, it may accelerate its decline to around $130. Another stock that has attracted attention, Micron Technology, Inc. (MU.US), has recently shown weakness, falling for six consecutive trading days, with a cumulative decline of nearly 25%. After the volume trading surrounding the performance, the stock price failed to maintain the breakthrough trend and quickly fell back, showing a lack of bullish momentum. Currently, the stock has fallen below the short-term moving average and relative strength trend, and if the correction continues, it may further decline to around $300 in the short term. The stock was around $355 on Thursday. Analysts point out that the semiconductor sector has benefited from the demand for artificial intelligence, and has been an important engine driving the rise of technology stocks. However, with valuation pressure, technical weakness, and a shift in market sentiment, cracks have begun to appear within the sector. Once this trend continues to spread, it may weaken the support base of the entire technology sector and weigh on the broader market.