The recent Trump-Xi meeting has resulted in no significant breakthroughs, particularly regarding rare earth metals and the ongoing conflict in Iran, leaving the semiconductor sector facing headwinds. Major U.S. stock indices are experiencing losses today, with the Russell 2000 down 2.4%, and tech giants like NVIDIA and Intel seeing sharp declines. NVIDIA’s stock is down 4.4% following disappointing news about Chinese purchases of American technology, while Intel has dropped over 6% amid profit-taking after a strong year.

The rise in U.S. bond yields, with the 10-year yield hitting its highest level in a year at 4.57%, is further complicating the market landscape. This uptick in yields has led to increased inflation concerns, as recent data showed higher-than-expected consumer and producer inflation rates. The market is now pricing in a 60% chance of an interest rate hike before year-end, which could dampen stock performance across sectors.

Market professionals should note that the combination of geopolitical uncertainties and rising inflation pressures is likely to continue influencing investor sentiment, particularly in the technology sector, where valuations may be at risk of correction.

StoxFeed tracks this as a market signal: AI and semiconductor stocks are driving tech sector gains

Source: xtb.com