On Wednesday, the Federal Reserve raised its key interest rate by 25 basis points to a target range of 3.75%–4.00%, marking the first increase since July 2023. This decision was unanimous among the 12 voting members and signaled potential for further rate hikes; 16 out of 18 officials anticipate at least one more hike this year. Following the announcement, the ten-year Treasury yield surpassed 5%, the highest since July 2007, leading to an initial drop of approximately 600 points in the Dow.
Contrary to expectations, the Nasdaq rallied by about 2% later in the week, primarily driven by gains in semiconductor stocks; SanDisk surged nearly 11% and AMD approached its 52-week high. AMD’s stock has risen 161% year-to-date, now valued at around $559.82, boosted by strong second-quarter earnings of $11.54 billion and forecasts for significant revenue growth. Meanwhile, SanDisk’s shares leapt due to a NAND flash shortage and its addition to the S&P 100, resulting in over 650% growth year-to-date.
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