# Value stocks rally as semis tumble, ketchup rotation gains traction

**Published:** 2026-07-30T08:49:56.593Z  
**Topic:** S P 500  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/d78ed3c7-b002-4e92-b131-9fbaf2105c68

Value ETFs up 3.5% in July while semiconductor ETF falls 26%; consumer staples like Kraft Heinz surge 14% YTD, signaling a shift to real‑economy plays.

Value‑focused ETFs posted gains in July, with the iShares Russell 1000 Value fund up 3.5% and the small‑cap counterpart soaring 22%, as the semiconductor sector slumped 26% amid a broader tech sell‑off [1].  

| At a glance | |
|---|---|
| Large‑cap value ETF (IWD) | +3.5% July |
| Small‑cap value ETF (IWN) | +22% July |
| Semiconductor ETF (SOXX) | –26% July |
| Nasdaq Composite | –6% July |

## Value outperforms, semis under pressure  
The Nasdaq Composite slipped more than 6% in July, edging toward a correction, while the iShares Semiconductor ETF dropped over a quarter for the month [1]. Momentum‑focused funds recorded their worst month on record, with the MSCI USA Momentum Factor ETF down more than 15% [1]. In contrast, value‑oriented funds rallied, reflecting a rotation toward companies tied to the real economy rather than AI‑driven growth. The large‑cap value index rose 3.5% in July and is up roughly 19% year‑to‑date, while its small‑cap counterpart posted a 22% gain this month [1].

## Consumer staples lead the “ketchup” rotation  
Peter Boockvar of One Point BFG Wealth Partners described the shift as “sell semis, buy ketchup,” highlighting a move into consumer staples. Kraft Heinz, labeled an “undervalued” favorite, has risen more than 14% this year—double the S&P 500’s gain—and posted an 8% jump in the first three days of the current week [1]. Coca‑Cola mirrored this performance with a similar 8% rise over the same period [1]. The sector’s appeal stems from perceived fundamentals bottoming and a broader investor flow toward stable, real‑economy businesses [1].

## Healthcare and small caps also benefit  
Healthcare stocks have rebounded after years of underperformance, with sector weighting in the S&P 500 improving from a low of 9% toward its historic peak of 16% [1]. JPMorgan’s Dubravko Lakos‑Bujas cites favorable valuations and expected earnings acceleration in 2027 as drivers of a potential inflection point [1]. Hedge funds remain overweight small caps, holding about 13% of their net portfolios in Russell 2000 names, according to MSCI data [1]. Ed Yardeni notes “AI fatigue” and a preference for businesses with clear models, reinforcing the tilt toward value and small‑cap exposure [1].

## What to watch  
- Upcoming U.S. earnings season: watch the first‑quarter results of major semiconductor firms for clues on sector depth.  
- Consumer‑staples guidance: monitor Kraft Heinz’s Q2 earnings and any updates to its pricing outlook.  
- Federal Reserve policy: any signals on interest‑rate stance could affect the relative appeal of growth versus value assets.  

The July shift underscores a broader market recalibration, with investors favoring sectors anchored in tangible demand while remaining cautious on AI‑driven growth narratives. The durability of this rotation will hinge on earnings trends in both semiconductors and consumer staples.

## Sources
1. CNBC — [Value stocks get a moment in the sun: 'Sell semis, buy ketchup'](https://www.cnbc.com/2026/07/29/value-stocks-get-a-moment-in-the-sun-sell-semis-buy-ketchup.html)
2. Macro-ops — [Sell Semis and Buy The Internet! | Macro Ops: Unparalleled Investing...](https://macro-ops.com/sell-semis-and-buy-the-internet/)
3. Investing — [Nasdaq 100 (NDX) Index - Investing.com](https://www.investing.com/indices/nq-100)

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Cite as: TrendWatcher, "Value stocks rally as semis tumble, ketchup rotation gains traction", https://www.trendwatcher.in/article/d78ed3c7-b002-4e92-b131-9fbaf2105c68