Treasury yields hit multiweek lows as chip rout spreads

Ten-year US Treasury and German Bund yields dropped to multiweek lows in early European trading on Thursday, October 15. The move came one day after hotter-than-expected US inflation data set off a brief but sharp bond selloff. Treasury yields hit three-week lows and the Bund yield touched a two-week low, according to Tradeweb data cited by MarketWatch. Bonds rallied as investors sought safety, while global semiconductor stocks extended a rout tied to fears of more Federal Reserve rate hikes.marketwatch.com

Inflation shock fades in bonds

US consumer prices rose 3.7% in the year to September, up from 3.4% in August and above the 3.6% economists expected. Core inflation rose to 2.6% from 2.4%, Investopedia reported. The 10-year yield briefly jumped above 5.32% after the report, then gave back most of that gain, the AP reported. "The market reacted as if stung by a bee," KBC Bank analysts wrote, referring to Wednesday's jump of up to 15 basis points in Treasury yields.cdapress.com+2

Bets on a rate hike at the Fed's October 28 meeting briefly reached 49%, up from 22% before the data, according to LSEG. They have since eased to about 29%. CME Group's FedWatch tool shows about a 71% chance that the Fed holds rates steady. Falling oil prices also helped push Treasury yields lower.marketwatch.com+1

Chipmakers extend rout

In Asia, Samsung Electronics fell 9.4%, SK Hynix ↗ 2.78% dropped 11% and SoftBank Group lost more than 9%, Investing.com reported. South Korea's Kospi fell as much as 8% at one point, triggering a brief trading halt, Bloomberg reported.swissinfo.ch+1

The selling spread to Europe. Infineon, Aixtron and ASM International each fell about 8%, while ASML ↗ 5.02% and STMicroelectronics ↗ 4.43% also dropped sharply. In US premarket trading, Micron ↗ 5.12%, Intel ↗ 7.71% and AMD Advanced Micro Devices, Inc. ↗ 11.04% all slid.finance.yahoo.com

The losses follow Wednesday's session on Wall Street, when the Nasdaq Composite fell 1.9% and the S&P 500 lost 1.1%. That day, Nvidia ↗ 2.78% fell 3.4% and Broadcom ↗ 0.74% fell 3.3%. A closely watched index of US chip stocks has now had its longest daily losing streak since May 2025.swissinfo.ch+2

Oil and rates in focus

High oil prices linked to the war in the Middle East are keeping US inflation elevated, which raises the chance of tougher central-bank tightening. The Fed raised rates in September for the first time in three years.swissinfo.ch+1

Julia Hermann of New York Life Investment Management warned that further increases in yields "could begin to challenge the very growth resilience that has allowed markets to absorb tighter financial conditions".marketwatch.com