Chip stocks are under pressure due to the long-term rise in U.S. Treasury yields and a significant increase in oil prices, which has reignited concerns about inflation. The sell-off has had the most severe impact on trades related to artificial intelligence ( AI ). Intel ( NASDAQ : INTC ) shares closed at $109.87, down 3%, a larger decline than other stocks in the chip sector.

Meanwhile, NVIDIA ( NASDAQ : NVDA ) reported a stock price of $234.02, a decrease of 1%, which is less than Intel's decline. AMD ( NASDAQ : AMD ) had a stock price of $632.96, a decrease of 2%, falling between the previous two.

Looking at the semiconductor sector as a whole, iShares Sem token issuance nductor ETF ( NASDAQ : SOXX ) closed at $572.20, down 2%, confirming the overall weakness in the chip sector. Invesco QQQ Trust ( NASDAQ : QQQ ) fell 0.6% to close at $753.46, with a smaller decline, indicating that tech stocks performed better than the semiconductor sector as a whole.

Yield and Oil Price Shocks AI Chip Trading

As long-term yields climb and oil prices soar, semiconductor companies have been sold off, reigniting concerns about stubborn inflation. Higher yields will raise the interest rates used to discount future profits, which typically exerts the greatest pressure on growth stocks that rely on earnings years down the line for their valuation.

AI chip leaders fit this characteristic, and therefore on such days, they tend to become the first targets for sellers. Power, cooling, and networking suppliers that support this expansion usually perform better. As mentioned in the original text, the author has previously introduced 7 AI infrastructure stocks that do not belong to chip manufacturers in a free report.