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Chip stocks drop as West Asia tensions and hotter PPI stoke rate fears
Shares of SK Hynix, Micron, AMD and Intel fell up to 6.5% on Sep. 10 after the US August PPI came in hotter than expected, reinforcing expectations for a Fed hike.
Chip stocks slid on Thursday, Sep. 10, as investors booked profits after recent gains while tensions between the US and Iran escalated in the Middle East. LiveMint Markets said that concerns around energy supply added to pressure across the semiconductor complex.
SK Hynix reversed a three day run-up, falling 6% to a day low of $187, after reaching a fresh peak near $191 in the prior session. Micron Technology dropped 4.2% to $982, AMD fell 3% to $504 and was on track to end its three day winning streak, while Intel was down 6.5% to $99.34.
Intel was also set to end a five day losing streak, and Nvidia slipped another 2.6% for a third straight day. LiveMint Markets also noted SanDisk shares fell about 4% on the day, even as chip makers remained higher year to date in September, including memory chip maker SK Hynix up 8.5% so far in the month.
The selloff was linked to macro data that raised inflation worries ahead of upcoming central bank and inflation releases. The US Producer Price Index rose 0.4% in August from the prior month and 5.4% from a year earlier, according to the Bureau of Labor Statistics, while the core measure excluding food and energy increased 0.2% and 4.6%, respectively, strengthening expectations for a potential Federal Reserve rate hike.