AMD, Nvidia lead semiconductor stocks higher following Fed rate cut

AMD (NASDAQ:AMD), Nvidia (NASDAQ:NVDA) and a host of other semiconductor stocks trended higher Thursday following the Federal Open Market Committee’s decision to slash its benchmark interest rate by 50 basis points on Wednesday.

It marked the first half-point rate cut the U.S. Federal Reserve has issued in four years.

Nvidia, Taiwan Semiconductor Manufacturing (NYSE:TSM), Broadcom (NASDAQ:AVGO) and Analog Devices (NASDAQ:ADI) all climbed 5% by noon trading. Advanced Micro Devices (AMD) jumped 6%.

Texas Instruments (TXN), Lattice Semiconductor (LSCC), NXP Semiconductors (NXPI), Microchip Technology (MCHP) and Qualcomm (QCOM) all increased 4%.

Intel (INTC), Micron Technology (MU) were up 2.5%, while Arm Holdings (ARM) and Dell (DELL) rose about 2%.

The Philadelphia Semiconductor Index (SOX) also added 5%.

“The bottom line is that rates are headed lower on a gradual basis over the coming year or more until we reach a neutral level that most consider to be approximately 3%,” said Seeking Alpha analyst Lawrence Fuller. “That is a positive rate of change and a tailwind for the economy and risk assets.”