The chip stock rout hasn't crushed the broader market, but investors should look out for these trends

Those opening to interest astir the renewed spot banal rout whitethorn find comfortableness successful the information that the broader markets are holding up precise well. 

The Dow Jones Industrial Average (^DJI) is inactive trading adjacent grounds highs and supra each cardinal moving averages, per Yahoo Finance AlphaSpace data. The S&P 500 (^GSPC) is holding supra its 100-day and 200-day moving averages, but precocious past week it slipped beneath the 50-day.

A fewer factors are preventing the spot banal pullback from harming the broader market, according to Charles Schwab strategist Kevin Gordon. However, investors should beryllium connected the lookout for whether these trends reverse.

'You've got fundamentally two-thirds of S&P 500 companies that are trading supra their 200-day moving average. That's comparatively steadfast and inactive accordant with the marketplace that is much rotational successful quality and not needfully 1 that is correctional," Gordon said connected Yahoo Finance's Opening Bid. 

The equal-weighted scale and cyclical stocks person each signaled a beardown economy, helium explained. "And erstwhile you bash look astatine the absorption of the marketplace to immoderate of these net beats, astir of the unit and astir of the underperformance has been concentrated successful the tech sector. Outside of that, erstwhile you look astatine financials oregon industrials oregon user discretionary, the absorption successful the marketplace has really been positive."

That's not to accidental what we are witnessing successful spot stocks is immoderate little worrying.

Semiconductor stocks are nether aggravated unit arsenic investors person begun questioning whether the artificial quality spending roar has go overheated and person grown much acrophobic astir rising contention from China. 

The fears intensified connected Tuesday aft the KOSPI (^KS11) plunged astir 11%, its worst league successful months. Memory spot giants Samsung Electronics (005930.KS) and SK Hynix (SKHY) some suffered double-digit declines that rippled done the planetary semiconductor sector. 

Adding to the anxiousness were reports that China has made important advancement successful representation chips done ChangXin Memory Technologies and successful home lithography equipment. That's raising concerns that Chinese companies could go stronger competitors to established chipmakers.

Hot names successful the US, specified arsenic Micron (MU) and Sandisk (SNDK), person been crushed to commencement the week. Sandisk mislaid 11.8% successful Monday's league and is apt to spot its declines widen today. Micron shed 3.25% connected Monday and is besides nether unit successful trading today.

"I'm not saying that there's thing to interest astir with this, but I deliberation that you spell done these much important rotations astatine times … So I deliberation it is simply a reminder to conscionable recognize the mechanics of this marketplace and however utmost immoderate of the moves tin be, particularly erstwhile you get into the megacaps," Gordon says.