What Happened?
A number of stocks fell in the morning session after the 10-year Treasury yield climbed to 5.14% following strong September business activity data that raised expectations for tighter Federal Reserve interest rate policy.
Technology and semiconductor shares came under selling pressure in premarket trading on September 24, according to TipRanks.
The 10-year Treasury yield is the return investors earn for lending money to the U.S. government for a decade. When it rises, safer bonds become more attractive compared with stocks. That shift matters most for technology companies. Their valuations often rest on profits expected years in the future. Higher yields reduce what those future earnings are worth in today’s dollars. The jump in yields followed strong September business activity data. Solid economic readings can lead investors to expect the Federal Reserve to keep interest rates higher, or raise them further, to prevent the economy from overheating.
Tighter policy increases borrowing costs and can weigh on growth-focused sectors. Other pressures added to the selling. Elevated crude oil prices raised concerns about inflation. There is also uncertainty over trade and tariffs on advanced semiconductors ahead of the summit between President Trump and Chinese President Xi Jinping. Tariffs are taxes on imported goods, and any new restrictions could affect chipmakers that depend on global supply chains and sales to China.
Together, rising rates, energy costs, and trade uncertainty created a difficult setting for the sector.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
Zooming In On Skyworks Solutions (SWKS)
Skyworks Solutions’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 10 days ago when the stock dropped 9.3% on the news that the chief executives of Anthropic, OpenAI, and SpaceX publicly united to call for a deliberate slowdown in the development of frontier AI models over escalating safety risks. According to CNBC, the sell-off was triggered by an essay published over the weekend by Anthropic CEO Dario Amodei, who urged a more cautious approach to frontier model advancement and called for independent safety monitoring. In a rare show of unity among competitors, the proposal was quickly endorsed by OpenAI CEO Sam Altman and SpaceX CEO Elon Musk. The unexpected warnings sparked immediate concern across the market regarding the sustainability of the heavy capital spending that has driven tech valuations higher. In response to the developments, Citigroup shifted to a neutral stance on broader equity risk, cautioning investors that any institutional pause or deceleration in AI deployments could temper corporate earnings growth and pressure chipmakers reliant on rapid, unchecked infrastructure expansion.
