What happened: Semiconductor stocks trimmed losses on Monday, with the PHLX Semiconductor Index (SOXX) recovering from a more than 2% drop as the sector shrugged off fears of increased competition from China and the overall market surged. What's behind the move: The initial move in semiconductors came after China's Alibaba (BABA) unveiled its most powerful AI model yet, Qwen3.8-Max. The developments highlight intense competition among Chinese tech firms to develop advanced AI systems that are both powerful and affordable. Semiconductor stocks have been at the center of the AI trade this year, helping propel the sector to a record high in June. Click here for in-depth analysis of the latest stock market news and events moving stock pricesRead the latest financial and business news from Yahoo Finance