Semiconductor chip stocks are declining to open this week’s trading cycle, with Sandisk (SNDK) and Micron (MU) in focus. Both stocks fell around 1% to open Tuesday’s trading, but have tanked over 13% each in the last five days. After a short-term climb in semiconductors last week, the end of last week into the present day has been a rough period for the chip stock sector. SNDK and MU are some of the biggest slip-ups, but why is that?
Despite reporting blowout corporate earnings driven by an unprecedented AI memory supercycle and soaring demand for data center hardware, the chips sector has been hit by the reality of surging bond yields. The 10-year US Treasury (^TNX) yield has jumped to a 12-month high of 4.61% amid rising inflation fears. The rising yields do not bode well for chip stocks, as is reflected in Sandisk and Micron’s recent performances.
The yield on 30-year US Treasuries climbed above 5.18%, reaching its highest level in nearly 19 years. Higher yields may increase mortgage and credit card borrowing costs, potentially weighing on consumer spending, while also adding pressure to highly valued technology and semiconductor stocks. Furthermore, Recent US data suggests inflationary pressures may be picking up again, partly due to higher oil prices following escalating tensions around Iran.
Also Read: Micron Gets $1,100 Price Target From HSBC & Melius, Cramer Sees Buy Signal
“While bond yields have been rising, the speed of the adjustment is important and could become a trigger for an equity correction,” Goldman Sachs strategist Peter Oppenheimer pointed out in a new note today. “Sharp bond yield moves have coincided with negative equity returns. The surge in government borrowing is an additional factor pushing up longer-dated yields across bond markets.”
Despite today’s dip, Wall Street recently handed Micron (MU) a notable price target increase on May 18, 2026. Both HSBC and Melius Research lifted their outlooks to $1,100 on the same morning. Shares closed at $681.54, down 5.95% after opening at $750.46.
