BUZZ-Chip stocks falls as investors wary of high interest rates
Chip stocks fell between 1% and 5% due to concerns about higher interest rates and profit booking after a massive rally. The Fed's decisions are raising fears of tighter monetary policy, which could impact end demand. Higher rates and geopolitical tensions may put pressure on higher multiple stocks. ARM, NVDA, and AMD have all seen significant gains this year.
** U.S-listed shares of Arm Holdings (ARM.O) , Advanced Micro Devices (AMD.O) , Intel (INTC.O) and Nvidia (NVDA.O) fall between 1% and 5%
** Analysts say worries of higher-for-longer interest rates and profit booking after a massive rally impacting chip stocks
** Fed’s decisions “raising fears that monetary policy could be kept tighter for longer to the potential detriment of end demand” - Russ Mould, investment director at AJ Bell
** Higher rates and geopolitical tensions likely to put pressure on higher multiple stocks such as ARM - Angelo Zino, senior equity analyst at CFRA Research
** Mixed results early into earnings season; ASML’s (ASML.AS) Q1 bookings missed expectations and TSMC (2330.TW) bullish on AI but lowered chip forecast outside the memory market - Zino
** Profit taking likely to hit semiconductor stocks harder than other areas of the market - Zino
** ARM has risen ~35% so far this year; NVDA and AMD have risen ~69% and ~4%, respectively