Kimi Technology Breakthrough Triggers AI, Semiconductor Stock Plunge on July 19; Leveraged ETF SOXL Falls Over 50%

According to Bloomberg, Chinese AI startup Kimi achieved an unexpected technology breakthrough on July 19, triggering a sharp selloff in global AI and semiconductor stocks on Friday. The semiconductor benchmark index fell approximately 20% from its June peak, entering bear market territory, while leveraged semiconductor ETF SOXL declined over 50% during the same period.

The selloff highlighted how rapid AI advancements can amplify market volatility through leveraged ETFs, options, and concentrated positions. Though leveraged ETFs represent only 1.2% of U.S. ETF industry assets, their concentrated holdings in volatile AI chips and high-growth stocks can trigger forced selling during daily rebalancing, magnifying existing market trends.