Asymmetric Impact of Inverted Yield Curve, FRAC Spread Count, and Billings Trends for Semiconductor Equipment Manufacturers on SOX Index

The motivation behind this study is to explore whether high oil prices, interest rate hikes, an inverted yield curve, and reduced semiconductor capital expenditures affect the PHLX Semiconductor Index in advance. The rise in inflation in 2022 is due to the supply chain tension following COVID-19, Israel-Hamas war in October of 2023, and the rise in international oil prices. Additionally, the Federal Open Market Committee decided to keep the federal benchmark interest rate unchanged at 5.00 to 5.25%. The cost of investment in turn affects the profitability and value of an enterprise. We use nonlinear autoregressive distributed lag to analyze the representation of the yield curve, the amount of shale oil production, the fab equipment spending month-on-month rate, and other independent variables for cointegration analysis of the Philadelphia Semiconductor Index. The research period spans from 1994 to 2021. The results of the study revealed that an increase in the fab equipment spending month-on-month rate, an increase in shale oil production in the short run, and the representation of the yield curve in the short run had a significant impact on the Philadelphia Semiconductor Index.