AMD (NASDAQ: AMD) stock fell 5% on Tuesday, mirroring a broader downturn in the semiconductor sector. This drop comes just ahead of the Federal Open Market Committee (FOMC) meeting, leaving investors on edge as they assess various market indicators.
Investors found themselves in a tense market atmosphere as AMD stock took a hit amidst a broader slump in semiconductor stocks. The decline was not isolated, with other industry players like Super Micro Computer (NASDAQ: SMCI) experiencing downturns. The repercussions of NVIDIA Corp’s GCT announcements from Monday further exacerbated the situation, contributing to the overall unease in the sector.
Adding to the concerns was the recent decision by the Bank of Japan to abandon its long-standing negative interest rate policy. This unexpected move added another layer of uncertainty to the market, particularly in anticipation of the FOMC meeting.
Investors closely monitor central bank meetings, such as the FOMC’s, for insights into future monetary policy decisions. Any indications of shifts in interest rates, specifically as reflected in the “dot plot,” have the potential to trigger significant fluctuations in stock prices.
Focus on FOMC Meeting
With no clear market drivers and the looming FOMC meeting, investors exercise caution, leading to subdued sentiment. Many eyes are on the Fed’s decision, with expectations of interest rates remaining unchanged. However, the focal point remains the “dot plot,” which outlines the anticipated trajectory of interest rates by FOMC members.
In December’s Fed meeting, indications pointed towards a potential series of three rate cuts in 2024 and an additional four in 2025. However, this plan is now facing scrutiny following recent inflation data that surpassed expectations, casting doubt on the feasibility of such aggressive rate cuts.
Advanced Micro Devices (NASDAQ: AMD) Stock Price Action
AMD stock declined 4.84% to close at $181.42 on Tuesday. The traders had exchanged hands with 83,320,760 (83.32 million) shares compared to the average daily trading volume of 75.91 million.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
