Shares of companies in the broader technology and semiconductor sectors, including Applied Materials, Inc. (NASDAQ:AMAT) and Lam Research Corporation (NASDAQ:LRCX), are trading lower amid a rise in US Treasury yields and in sympathy with the overall market in anticipation of expected Fed rate hikes this year as the Fed seeks to curb inflation.
A more aggressive rate hike approach to curb inflation could weigh on growth stocks. The 10-year U.S. Treasury yield is again hovering around a new two-year high, which has pressured valuations in 2022. The 10-year Treasury yield hit an intraday high of 2.784% Monday morning before dipping to around the 2.700% level. When interest rates rise, the value of future cash flows is reduced for growth stocks, which in turn lower the value of the stock.
