Chip Stocks Lead Wall Street Lower as 10-Year Treasury Yield Climbs to 5.17%

By midday in New York the Nasdaq Composite was down 1.6%, the S&P 500 0.9% and the Dow Jones Industrial Average 0.2%, according to Yahoo Finance's market coverage. The Philadelphia Semiconductor Index fell around 5%, Investing.com reported, and the Cboe Volatility Index rose above 20 in morning trading.

The selling hit hardest the stocks that had gained most as investors moved money out of Nvidia earlier in the week. AMD fell about 9% and Broadcom about 6%. Intel and Micron each lost about 5%, and Sandisk dropped 9%. AMD had jumped 5.9% on Thursday after Bank of America raised its price target to $700. Nvidia slid more than 4%, taking its market value below $4 trillion.

Higher borrowing costs added to the pressure on highly valued technology shares. The 10-year yield had been 5.10% on Thursday. Producer prices rose 0.3% in October, slightly below the 0.4% forecast, but the annual rate reached 6.5%, the biggest increase since November 2022, Yahoo Finance reported. Traders are bracing for the Federal Reserve to raise rates in December. Fed governor Michelle Bowman said on Tuesday that "inflation pressures have persisted for longer than I had hoped and have shown recent signs of broadening."

Nvidia also lost an analyst's support. HSBC downgraded the stock to hold from buy and cut its price target to $170 from $365. Analyst Frank Lee wrote that investor confidence had been "shaken" and that the company's "leadership succession plan is unclear." Arm Holdings fell more than 5% after the Financial Times reported that Nvidia's board had approached Arm chief executive Rene Haas about the top job.

On Thursday, Nvidia shares fell as much as 14% at the open, their lowest since June 2025, before closing about 4% lower. Vanda Research estimated that small investors bought a net $111 million of the stock in the first 30 minutes of that session, about 40 times a normal opening.

Cerebras bucked the trend, rising more than 10% after the AI chipmaker reported that third-quarter core revenue rose 70% to $230.9 million. It forecast fourth-quarter core revenue of $310 million to $330 million, above the $271.2 million analysts expected. Chief executive Andrew Feldman said the company expects revenue to triple in 2027.

Investors also pulled back from other risky assets. Bitcoin fell below $70,000 for the first time in nearly three months, touching about $68,000, and is down more than 10% in November.

Goldman Sachs strategist Kamakshya Trivedi said he expects the boost to growth from AI investment to peak in early 2027, which he said could be a "bigger test for markets."

Nvidia reports quarterly results on Tuesday, still without a permanent chief executive.