What happened
Shares of Applied Materials (AMAT 0.19%) fell as much as 9.4% in trading on Thursday as positive economic news and data out of China caused the market to fall. Shares were still down 8.2% at 3 p.m. ET.
So what
There were a number of factors impacting Applied Materials and semiconductor and industrial stocks more broadly. There was macro news like the final estimate of third-quarter GDP growth of 3.2% in the U.S., above the previous estimate of 2.9%. This is causing investors to speculate that interest rates will continue rising to combat a hot economy and inflation.
Specific to the chip industry, Micron (MU 0.80%) said there will be a supply-and-demand imbalance in 2023 and that it's cutting 10% of the workforce. Data from China also indicated that imports of semiconductor equipment fell 40% in November from a year earlier due to U.S. export restrictions.
Now what
Just as Applied Materials puts more focus into semiconductors, the market may be going south. Low interest rates and a hot economy were tailwinds the last few years, but that may reverse itself, causing the oversupply Micron is worried about.
While the news wasn't great today, none of it was specific to Applied Materials, so this was more of a broad sell-off. I wouldn't be worried about that, but this is why buying and holding through market ups and downs is the best way to make money. As chip stocks fall, I think there are more buying opportunities, especially in industry leaders like Applied Materials.
