What Happened?
A number of stocks fell in the morning session after benchmark 10-year U.S. Treasury yields rose above 5.1%, renewing pressure on high-multiple technology valuations.
The pullback follows a six-session climb that had lifted the Philadelphia Semiconductor Index by 14% since the start of the week, according to Nasdaq index data. Bond yields reached their highest level since July 2007 after a stronger-than-expected September composite purchasing managers' index of 58.4 pushed the implied probability of an October Federal Reserve interest-rate hike to 73%, according to Fed funds futures reported by Reuters. Sector sentiment also faced cross-currents from competitor supply and investor positioning. Samsung announced it is allocating over half of its 4-nanometer foundry capacity to high-bandwidth memory base dies, raising concerns about future supply competition.
Meanwhile, investor Michael Burry expanded short positions in Micron and semiconductor exchange-traded funds on expectations that memory shortages are cyclical rather than structural, CNBC reported. When benchmark bond yields rise, semiconductor valuations face mechanical headwinds because investors heavily discount cash flows projected years into the future. Paired with expanding foundry capacity and looming supply additions, higher capital costs make investors less willing to pay premium multiples for cyclical hardware makers until end-market demand visibility clears.
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:
- Analog Semiconductors company Microchip Technology (NASDAQ: MCHP) fell 3%. Is now the time to buy Microchip Technology? Access our full analysis report here, it’s free.
- Analog Semiconductors company Skyworks Solutions (NASDAQ: SWKS) fell 3.2%. Is now the time to buy Skyworks Solutions? Access our full analysis report here, it’s free.
- Analog Semiconductors company Universal Display (NASDAQ: OLED) fell 3.2%. Is now the time to buy Universal Display? Access our full analysis report here, it’s free.
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.
Skyworks Solutions is up 37.8% since the beginning of the year, and at $88.75 per share, it is trading close to its 52-week high of $91.45 from September 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Skyworks Solutions’s shares 5 years ago would now be looking at only $514.02.
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