Western Digital +4% and Micron +3% Lead Chipstock Rally on Yield Drop
Western Digital jumped 4% and Micron gained 3% as chip stocks rallied on a 2-basis-point drop in 10-year Treasury yields to 4.20% following a weak ADP report. Travel names also climbed, with Expedia up 5% and Delta Airlines rising 3% after airlines raised Q1 revenue forecasts.
1. Macro Tensions and Oil
Renewed Iranian attacks on energy infrastructure spurred operations suspensions at the Shah gas field and halted crude loadings at Fujairah, pushing WTI crude up more than 1%. Elevated oil prices have sustained inflation concerns, briefly weighing on markets before technology and travel sectors regained strength.
2. Bond Market Reaction
A softer ADP employment change of just 9,000 jobs over four weeks signaled a slowdown in hiring, driving 10-year Treasury yields down 2 basis points to 4.197%. Markets now see only a 1% chance of a 25-basis-point rate cut at the upcoming FOMC meeting, reinforcing a fed funds pause.
3. Chip Stocks Lead Gains
Semiconductor names outperformed, with Western Digital and ARM Holdings surging over 4%, Micron and Seagate up more than 3%, and KLA climbing over 2%. As a chipmaker, SMTC likely mirrored this rally, benefiting from lower financing costs and resilient demand for AI and data-center hardware.
4. Travel Sector Upswing
Airlines and travel firms rallied as Delta Airlines raised its Q1 revenue forecast to high-single-digit growth, boosting its stock by 3%. Expedia jumped 5% on reports of rising booking volumes, with travelers rushing to lock in tickets ahead of expected fuel-driven price hikes.