Interest Rate Cut Expectations Boost High-Yield Bonds and Semiconductor Stocks
Interest Rate Cut Expectations Boost High-Yield Bonds and Semiconductor Stocks
As the likelihood of interest rate cuts in the United States increases, interest in high-yield bonds is growing. Approximately $1.2 billion flowed into the 'iShares iBoxx $ High Yield Corporate Bond' (HYG) ETF over the past month, making it the seventh-largest amount among US bond ETFs. High-yield bonds are known for their attractiveness in providing high returns at high risk. The anticipation of Federal Reserve rate cuts further enhances the appeal of these bonds. There are positive expectations for reduced corporate default rates and increased yields, although recession risks remain. Investing in high-credit-rating companies offers relative safety under these circumstances. Similarly, semiconductor stocks have shown an upward trend due to possible rate cuts. The expected reduction in interest burdens could lead to increased corporate investment and recovery in semiconductor demand. The semiconductor industry would potentially benefit from lower capital costs and overall stimulated demand. This is reflected in the gains of 5.45% for Microchip Technology and 6.06% for ON Semiconductor. Additionally, Nvidia and Broadcom saw rises of 1.40% and 1.45%, respectively. These market movements indicate that rate cut expectations might positively impact tech stocks and the industry at large.
Related News
한국경제2025 8月 23
Is '7% per annum' interest rate real… Over 1 trillion flowed in quickly - Korea Economic DailyIs '7% per annum' interest rate real… Over 1 trillion flowed in quickly, Reporter Suji Na, Securities
이데일리2025 8月 22
[U.S. Feature Stock] Semiconductor Stocks Rise Sharply on Rate Cut Expectations - EdailySemiconductor stocks are rising sharply due to the possibility of a rate cut by the Fed in September. The easing of interest rate burdens is heightening expectations for corporate investment and semiconductor demand recovery, leading to buying interest across the sector. At 1:01 PM (local time) on the 22nd, the VanEck Semiconductor ETF (SMH), a semiconductor index fund, was ...