What Happened?
A number of stocks jumped in the afternoon session after Treasury yields retreated below 5% and oil prices declined, sparking a recovery across growth-oriented equities following the Federal Reserve's interest rate increase.
The benchmark 10-year Treasury yield dropped to 4.949%, alleviating pressure on borrowing costs and valuation multiples per CNBC. Technology and semiconductor stocks had faced sharp selling in the prior session after the Federal Reserve unanimously raised its benchmark interest rate by 25 basis points to a target range of 3.75% to 4.00%. Lower yields often provide a tailwind for technology companies, whose high-growth valuations are sensitive to the discount rates applied to projected earnings.
Additionally, falling energy prices eased worries regarding persistent inflation, helping major stock indices rebound from their post-announcement declines.
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:
- Memory Semiconductors company Micron (NASDAQ:MU) jumped 5.4%. Is now the time to buy Micron? Access our full analysis report here, it’s free.
- Processors and Graphics Chips company Qualcomm (NASDAQ:QCOM) jumped 3.5%. Is now the time to buy Qualcomm? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Nova (NASDAQ:NVMI) jumped 2.4%. Is now the time to buy Nova? Access our full analysis report here, it’s free.
- Processors and Graphics Chips company Lattice Semiconductor (NASDAQ:LSCC) jumped 3.1%. Is now the time to buy Lattice Semiconductor? Access our full analysis report here, it’s free.
- Finance and Accounting Software company Workday (NASDAQ:WDAY) jumped 5.3%. Is now the time to buy Workday? Access our full analysis report here, it’s free.
Zooming In On Micron (MU)
Micron’s shares are extremely volatile and have had 74 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 13 days ago when the stock gained 4.2% on the news that investors shrugged off interest rate hike expectations following the August jobs report and unwound defensive positioning in beaten-down chip designers, according to Bloomberg. The U.S. Bureau of Labor Statistics reported that employers added 162,000 nonfarm payroll jobs in August, easily beating estimates of a 56,000 increase from economists polled by FactSet. The agency also reported that the national unemployment rate held steady at 4.1%. The strong labor data initially raised expectations for further monetary tightening, but odds of a September quarter-point interest rate hike settled at a coin-toss 50%, according to federal funds futures data reported by Bloomberg. Typically, higher interest rates place downward pressure on high-growth technology equities by discounting future projected cash flows.Despite these macroeconomic concerns, traders rotated back into the chip sector. During the regular session, KLA Corporation rose 7.98% and Semtech climbed 7.96%, while Marvell Technology advanced 5.92% and Advanced Micro Devices gained 4.18%, according to stock market quote data.
Micron is up 210% since the beginning of the year, but at $976.79 per share, it is still trading 19.5% below its 52-week high of $1,214 from June 2026. Investors who bought $1,000 worth of Micron’s shares 5 years ago would now be looking at an investment worth $13,147.
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