What Happened?
A number of stocks fell in the afternoon 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:
- Semiconductor Manufacturing company Lam Research (NASDAQ: LRCX) fell 2.2%. Is now the time to buy Lam Research? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Marvell Technology (NASDAQ: MRVL) fell 2%. Is now the time to buy Marvell Technology? Access our full analysis report here, it’s free.
- Memory Semiconductors company Western Digital (NASDAQ: WDC) fell 4.1%. Is now the time to buy Western Digital? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company FormFactor (NASDAQ: FORM) fell 3.9%. Is now the time to buy FormFactor? Access our full analysis report here, it’s free.
- Processors and Graphics Chips company Penguin Solutions (NASDAQ: PENG) fell 3.1%. Is now the time to buy Penguin Solutions? Access our full analysis report here, it’s free.
Zooming In On Western Digital (WDC)
Western Digital’s shares are extremely volatile and have had 76 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 4.8% on the news that the company announced the redemption of all $109.5 million of its 3% convertible notes amid broader weakness across AI memory and storage stocks. Under the terms of the redemption set for November 16, 2026, noteholders are permitted to convert their notes beforehand, with principal settled in cash and any remaining value delivered in common stock per TipRanks. The decline also coincided with broader selling pressure across the sector, where peers including Micron, SanDisk, and SK Hynix fell as investors reassessed the industry outlook amid analyst price target reviews and potential demand risks in the AI storage market.
Western Digital is up 144% since the beginning of the year, but at $458.52 per share, it is still trading 38.6% below its 52-week high of $746.23 from June 2026. Investors who bought $1,000 worth of Western Digital’s shares 5 years ago would now be looking at an investment worth $7,914.
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