Infographic | Gelonghui: The "technology soft-to-hard ratio" indicator for US stocks has fallen to around 5.3

Glonghui, June 2nd – Looking at the trend from 2023 to the present, there has been a fundamental reversal in the relative strength between the US Philadelphia Semiconductor Index and the S&P Technology Software ETF: from 2023 to 2025, both tracked higher simultaneously, with the software sector consistently leading. However, after entering 2026, the semiconductor index showed a steep and independent rally, with a short-term increase of nearly 40%, reaching a new historical high, while the technology software sector fell about 30% from its peak during the same period. Currently, the semiconductor index has deviated severely from medium- and long-term moving averages, and is clearly in an overheated, overbought range, whereas the software sector is fluctuating at a relatively low level. This pattern of “overheating on one side and correction on the other” has created the conditions for a high-to-low rotation in market style, while the risk of profit-taking at high levels in the semiconductor sector is quickly accumulating. Glonghui’s proprietary “Tech Soft-Hard Ratio” (SOXX/IGV)—used to track market style preference and offering strong forward-looking insight—has climbed from a level below 2.0 during the same period in 2025 to nearly 6.0. Over the past three weeks, a downward trend has emerged, with the ratio retreating to around 5.3.