Momentum ETF MTUM enters correction as chip selloff seen as momentum unwind, not AI demand break

According to CNBC, the iShares MSCI USA Momentum Factor ETF (MTUM) fell just over 10% from its high close on June 22 to its Wednesday open, meeting the definition of a correction, before rebounding; at 12:30 p.m. ET it was up 0.4%. CNBC said Wall Street trading desks largely viewed the recent drop in chip and AI-linked stocks as an unwinding of momentum positioning rather than evidence of weakening artificial intelligence demand, citing profit taking and concentrated outflows from momentum strategies. The report noted Broadcom was up 6% in midday trading, while Micron traded off its highs after earlier gains, and said the memory sell-off followed a Samsung revenue miss and comments from Amazon that it would not issue more debt this year. CNBC also reported that South Korean memory maker SK Hynix is expected to list 18 million U.S. shares at the end of the week in an effort to raise nearly $30 billion.