Are Index Funds Making the Market "Irrational"?

The question of whether index funds make the market “irrational” centers on a Motley Fool Hidden Gems Investing episode recorded July 6, 2026, featuring Jon Quast, Matt Frankel, and Rachel Warren. The discussion links ETF and index-fund mechanics to how markets may behave, while also tying in near-term catalysts in the AI supply chain. A key example raised is SK Hynix, a South Korea-based computer memory company, which plans this week to list American depository shares (ADRs) in the U.S. under the ticker SKHY. The plan targets nearly 178 million ADR shares to raise roughly $28 billion, intended to fund new factories and chipmaking equipment. Warren explains high-bandwidth memory (HBM) as a stacked memory approach located close to processors, potentially enabling data transfer up to 10 times faster with lower power—important for AI workloads. The episode also examines what happens to ETFs when companies go public and how index products influence pricing.