Memory Stocks Drop Amid Rising Rates and Oil Prices Despite JPMorgan Upgrade
Despite an Overweight rating from JPMorgan with a $245 price target, SK Hynix shares fell by 5%, while Micron Technology and Western Digital each dropped 3%. The broader memory sector was under pressure as the Roundhill Memory ETF declined 3% compared to just a 0.57% drop in the S&P 500 ETF Trust (SPY). This selloff reflects macroeconomic concerns, with the 10-year Treasury yield reaching nearly three-year highs and oil prices surpassing $100 per barrel amid renewed Middle East tensions. The decline contrasts recent strong performance for memory stocks. SK Hynix's American depositary shares had risen by over 40% in a month before Thursday’s drop, while Micron reported record fiscal Q3 results with revenue of $41.46 billion and guidance pointing to continued growth into Q4. Western Digital also showed resilience with strong recent earnings and positive forward-looking guidance. The market selloff highlights the sensitivity of memory stocks to macroeconomic conditions such as interest rates, inflation expectations, and energy prices. Despite JPMorgan's bullish stance on SK Hynix, investors are reacting more strongly to broader economic risks ahead of a potential Federal Reserve rate hike next week.
Topics: interest rates JPMorgan rating memory stocks oil prices