AMD Stock: Reasons Behind Today’s Huge Drop

AMD Stock


AMD Stock (NASDAQ:AMD), a semiconductor company, was trading down today, most likely reacting to new data on unemployment claims in the United States.

The most recent job report indicated a stronger-than-expected labor market, and investors are evaluating this information now. Because of this, some people are concerned that the Federal Reserve will keep increasing interest rates to slow down the economy.

As of the 14:14 hour today ET, AMD stock (NASDAQ:AMD) had plummeted 6.4%.

Then What?

No particular company-related news led to today’s decline in the price of AMD stock. Instead, it seems like stockholders of Advanced Micro Devices (NASDAQ:AMD) were responding to the most recent news on unemployment claims. The United States Department of Labor said today that 193,000 people filed for unemployment benefits for the week that ended on September 24. This number was lower than the consensus estimate of 215,000 compiled by experts.

People seeking work will benefit from a robust labor market, but it also implies that the Federal Reserve can continue to hike interest rates aggressively without worrying that this would significantly impact the employment market.

However, AMD stock investors, and investors more generally, are concerned that the Federal Reserve will increase interest rates too rapidly, which might ultimately lead to a downturn in the economy in the United States.

When supply chain challenges are already producing difficulties in the semiconductor business, a significant economic downturn might affect the sales of AMD’s chips. This situation is already a possibility.

What’s Next?

Even while it is not unexpected to see AMD stock tumble in response to the most recent news on the job market, it is still not very enjoyable for those who invest in technology. There is a genuine fear that the Federal Reserve is moving too quickly, and several technology businesses have already laid off employees, imposed hiring freezes, and issued warnings about the possibility of an economic downturn.

AMD Stock is expected to witness further share-price volatility as investors attempt to judge the economy’s general health. Long-term investors know that purchasing and hanging on to outstanding firms for at least five years is the greatest way to weather market downturns.

Even if the job market statistics showed improvement, AMD stock went down on the news that the Fed would raise interest rates again.

Featured Image-  Megapixl @ Hisdx15

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About the author: I'm a financial journalist with more than 1.5 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.