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The trade that carried Wall Street through much of 2026 just suffered its longest losing streak in more than two decades.
The iShares Semiconductor ETF (NASDAQ: SOXX) fell for a ninth straight session Friday, its longest skid since May 2006. The fund lost about 14% since Oct. 5 and 9.4% for the week.
The shift goes deeper than a sell-off. Investors aren't abandoning the AI buildout, but they're asking a question that has taken a back seat for months: Who pays for it?
The Federal Reserve raised rates to 5.00% on May 10, 2006. At the time, it was the sixteenth straight hike, and investors sold emerging-market equities alongside commodities.
The semiconductor sector, a favorite the prior year, was among the first to crack.
Fast forward to 2026: The Fed lifted rates to 3.75%-4.00% in September. The 10-year Treasury yield sat at about 5.09% on Friday, Oct. 16, after touching 5.37% last week.
September consumer prices rose 3.7% from a year earlier, above the 3.6% expected, while the producer price index climbed 6.3%, a four-year high.
Odds of an October hike jumped to nearly 50% after the CPI report, then eased to about 17% by Friday morning, according to CME FedWatch.
If memory is the plumbing of artificial intelligence, CoreWeave Inc. (CRWV)'s bonds are the water bill.
The cloud provider fell 15.5% on Wednesday as the cost of insuring its debt hit a record, and its 9% notes slid to about 80 cents on the dollar, yielding more than 15%.
CoreWeave's credit default swaps, which insurance investors buy to hedge against default, jumped past 1,000 basis points. This implies roughly a 60% chance of default within five years.
Inside the iShares Semiconductor ETF:
Every holding shown in the Roundhill Memory ETF (NYSE: DRAM) finished lower, and optical names fell the most since the dot-com bust. But the sharpest moves came in the networking hardware that wires AI data centers together:
South Korea's KOSPI fell 14.46% this week, its worst weekly drop since October 2008, when it lost 20.5% after Lehman Brothers collapsed.
Even the March 2020 crash never produced a weekly loss that large.
Thursday alone brought a 7.57% plunge and a 20-minute trading halt.
SK Hynix Inc. (SKHY) lost 24.3% on the week and Samsung Electronics Co. Ltd. (SSNLF) 17.8%, both their worst weeks since 2008.
Bank of America analyst Vivek Arya reached for a different dot-com analogy in a Friday client note.
Nvidia Corp. (NVDA), Broadcom Inc. (AVGO) and Micron trade at about 13 times forward earnings on average, inside the 10-to-20 range where Cisco Systems Inc. (CSCO) changed hands after its bubble burst.
"Investors are paying post-crash multiples for a cycle that hasn't crashed," Arya said.
Cisco peaked at $82 in March 2000, fell to $8.12 by October 2002 and did not reclaim its high until March 2026. The Philadelphia Semiconductor Index now sits about 22% below its June 22 record, its second bear market this year.
Money did not leave the market. It moved.
The Dow Jones Industrial Average gained about 1.4% this week while the Nasdaq 100 lost nearly 4% and the S&P 500 about 0.8%, and the 10-year yield fell about 15 basis points as investors sought bonds.
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