Chip Stocks Endure Longest Losing Streak Since 2006 as CoreWeave Credit Concerns Mount: This Week on Wall Street
Key takeaways
- Chip‑sector pain deepens as rising rates and CoreWeave’s credit worries push the market toward safer assets.
- SOXX down 14% since Oct. 5
- SOXX down 9.4% for the week
- CoreWeave bonds fell 15.5%
What happened
The iShares Semiconductor ETF slid for a ninth straight session, its longest losing streak since May 2006, dropping about 14% since Oct. 5 and 9.4% for the week. CoreWeave Inc. saw its bonds fall 15.5% and its 9% notes trade near 80 ¢, implying a 60 % chance of default within five years. Credit default swaps for CoreWeave jumped past 1,000 bps, and the 10‑year Treasury yield hovered around 5.09 % after peaking at 5.37 % last week.
Why it matters
The sustained sell‑off reflects growing concerns about the cost of financing AI infrastructure, highlighted by CoreWeave’s credit deterioration. Rising borrowing costs and higher inflation have tightened margins for chip makers and cloud providers, pressuring their valuations. The decline in SOXX signals a broader…
Short-term and longer-term
Short-term. Over the next few days, watch SOXX for a potential rebound if Treasury yields ease or if CoreWeave’s credit metrics improve.
Longer-term. For the coming months, the semiconductor sector’s valuation compression and CoreWeave’s credit risk suggest a cautious stance.