What Happened?
Shares of semiconductor manufacturer Vishay Intertechnology (NYSE: VSH) fell 2.7% in the afternoon session after markets faded the Nvidia rally in the morning session, as investors remained uncertain about future rate cuts.
While the trading day began with significant enthusiasm, pushing the Dow Jones Industrial Average up more than 700 points and the Nasdaq Composite up 2.6%, momentum quickly evaporated as the session wore on. The primary catalyst for this sharp reversal was a stronger-than-expected jobs report, which reduced the implied odds of a December interest rate cut to less than 40%. This macroeconomic anxiety overshadowed stellar corporate performance. Nvidia initially surged 5% on blockbuster earnings and CEO Jensen Huang's bullish outlook on "off the charts" demand for Blackwell chips. However, the stock eventually turned negative, acting as a heavy weight that dragged the broader indices into the red. The sell-off partly reflects a deepening caution regarding high-flying tech valuations in a "higher-for-longer" rate environment.
Consequently, investors appeared to rotate capital away from volatile growth sectors and toward defensive staples, evidenced by Walmart's 6% gain following its own earnings beat. Ultimately, the market could not sustain the morning's euphoria, as traders prioritized rate realities over AI potential.
The shares closed the day at $11.82, down 3.9% from previous close.
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What Is The Market Telling Us
Vishay Intertechnology’s shares are very volatile and have had 22 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 9 days ago when the stock dropped 3.3% on the news that negative news from a data center company and a significant sale of Nvidia shares by a major investor fueled a broader sell-off. The downturn in chip stocks followed an announcement from CoreWeave Inc that a data center delay would negatively affect its financial expectations, leading to a downgrade by JPMorgan Chase. This news created concern across the industry, weighing on other chipmakers including ARM Holdings, Micron Technology, and Lam Research. Further pressure came as the technology-heavy Nasdaq Composite index fell, with companies like Nvidia dropping after reports that SoftBank had sold its stake.
Vishay Intertechnology is down 29.1% since the beginning of the year, and at $11.83 per share, it is trading 39.1% below its 52-week high of $19.41 from December 2024. Investors who bought $1,000 worth of Vishay Intertechnology’s shares 5 years ago would now be looking at an investment worth $645.12.
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