Strong Jobs Report Fuels Yield Jump, Pressuring S&P 500 Futures and Semiconductor Stocks
SOXQ has more than doubled off its 52-week low of $39.09 on elevated volume (3.0× avg).
Summary
A much stronger-than-expected May jobs report, with 172,000 new jobs against an 85,000 estimate, has caused a significant jump in Treasury yields. The 10-year yield rose to 4.54% from 4.48% pre-data, reducing the probability of Fed rate cuts and increasing the chance of a rate hike by year-end. This macroeconomic data is pressuring S&P 500 futures, with the technology sector being the weakest, and the Invesco PHLX Semiconductor ETF (SOXQ) sliding around 3% in premarket trading. Higher interest rates negatively impact growth-oriented sectors like semiconductors by increasing the cost of capital and discounting future earnings more heavily.
At the time of this announcement, SOXQ was trading at $103.47 on NASDAQ in the Technology sector. The 52-week trading range was $39.09 to $110.54. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Reuters.