Micron Technology slides with PHLX Semiconductor index plunging over 10%
MU•Micron Technology shares fell alongside sector peers as the PHLX Semiconductor index tumbled over 10% during the worst Nasdaq drop in 14 months. Rising U.S. bond yields triggered by a stronger-than-expected May jobs report intensified the selloff and pressured AI chip demand.
1. Bond Yields Surge After Strong Jobs Report
A stronger-than-expected May jobs report pushed U.S. Treasury yields higher, raising borrowing costs and triggering a selloff in high-growth technology stocks. Higher yields diminish the present value of future earnings, particularly impacting companies with elevated growth expectations in AI and semiconductors.
2. Semiconductor Sector Bloodbath Hits Micron
The Nasdaq fell 4.2% in its steepest session in 14 months, while the PHLX Semiconductor index plunged over 10%. Micron Technology shares slid in line with peers such as Nvidia, Broadcom and AMD, as investors retreated from chip-related exposure.
3. AI Investment and Inflation Fears Intensify
Debate over substantial AI spending, including proposals for government stakes in AI firms, has reignited inflation concerns by boosting demand for labor and equipment. Persistent inflation above the Fed’s target and heightened capital expenditure expectations weighed on chip demand forecasts.
