Nasdaq-100 is on the edge of correction territory as semiconductor stocks take another beating

The recent decline in semiconductor stocks, which has pushed the Nasdaq-100 to the brink of correction territory, may seem like a concern for equity investors, but it's worth noting that this development has had limited impact on bond markets so far. The Nasdaq-100 is down about 10% from its recent peak, which is just shy of the 10% decline that defines a correction.

This decline in semiconductor stocks is significant because the sector has been a key driver of the broader technology sector, which has in turn been a major contributor to the gains in US equities over the past year. A sustained decline in semiconductor stocks could have implications for the broader equity market, potentially leading to increased volatility and a decrease in investor appetite for risk. However, it's worth noting that bond yields have not shown a significant reaction to this decline, suggesting that investors are not yet seeking safe-haven assets in large numbers.

Looking ahead, bond investors will be watching to see if this decline in semiconductor stocks spreads to other sectors, potentially leading to a broader equity market sell-off. They will also be keeping a close eye on economic data, such as the upcoming US GDP report, to gauge the overall health of the economy and assess the potential impact on interest rates. Additionally, the Federal Reserve's next policy meeting will be closely watched for any signs of a shift in monetary policy, which could have implications for bond yields and the broader financial markets.

Originally reported by marketwatch.com. BondNews adds analysis for finance & markets readers.