What happened
Shares of semiconductor specialist Advanced Micro Devices (AMD 3.14%) were falling today, likely in response to new data on U.S. jobless claims.
Investors are processing the latest employment data that showed a stronger-than-expected labor market. That has some worried the Federal Reserve will continue to raise interest rates to cool the economy down.
As of 1:14 p.m. ET, AMD's stock had fallen 6.4%.
So what
There wasn't any company-specific news sending AMD's stock price lower today. Instead, it appears that AMD shareholders were reacting to the latest jobless claims report. The Department of Labor said today that there were 193,000 jobless claims for the week ending on Sept. 24, which was lower than analysts' consensus estimate of 215,000.
Image source: Getty Images.
While a strong labor market is good for people looking for jobs, it also means that the Federal Reserve could continue to raise rates aggressively without fear that the job market will be affected too much.
But AMD shareholders -- and investors more broadly -- are worried that the Fed will raise rates too quickly and end up tipping the U.S. economy into a recession.
Any significant slowdown in the economy could end up hurting AMD's chips sales at a time when supply chain issues are already causing difficulties in the semiconductor market.
Now what
It's not surprising to see AMD's stock reeling from the latest labor market data, but it's still not any fun for tech investors. There's real concern that the Fed is moving too aggressively, and some technology companies have already cut jobs, issued hiring freezes, and warned about a potential economic slowdown.
Long-term investors know that buying and holding great companies for five years or more is the best way to ride out these market downturns, but AMD is likely to see more share-price swings as investors try to gauge the overall strength of the economy.
