Chip Selloff Deepens at Midday as Hot CPI Sends Yields Higher: Dell Plunges 10%, Credo Sheds 8% and SOXX Falls Nearly 4%

Semiconductor stocks sold off hard at midday Wednesday. The iShares Semiconductor ETF (SOXX) was down 3.94% and the VanEck Semiconductor ETF (SMH) was down about 3.4%, with losses widening from late morning. A hotter-than-expected September inflation report sent Treasury yields higher, and chip investors were already digesting fresh worries about Chinese competition in memory and doubts about how long AI spending can keep growing.

Chipmakers and ETFs

Every name on the list was lower. Credo and Astera Labs, which sell the connectivity chips that link AI servers, fell 7.8% and 5.5%. AMD and Arm each lost more than 5%. Broadcom and Taiwan Semiconductor held up best, down 2.8% and 2.9%. Losses were wider than they were a few hours earlier. At 11:39 AM ET, Benzinga had SOXX down 2.3% and noted it was on a seventh straight losing session and nearly 10% below its October 5 close, with Nvidia down 1.9%, Broadcom down 1.7% and Micron down 1.6%.

Memory, storage and AI servers

Memory and storage names fell between 2.9% and 5.4%, with SanDisk's $70.82 drop the largest in dollar terms on our list. Dell's fall deepened to more than 10% from about 8% in the morning, and Super Micro lost more than 6%. Dell was already weak Wednesday after Barclays downgraded it, along with HPE and NetApp, warning that their large 2026 rallies reflect rising memory-driven selling prices rather than meaningful AI revenue growth. That argument bears directly on memory-linked stocks.

What is driving the selling

Hot inflation and rising yields. September CPI rose 3.7% from a year earlier against 3.6% expected, and core CPI came in at 2.6%. By late morning the 10-year Treasury yield was up about 10 basis points to 5.31% and the 2-year was up 14 basis points to 4.93%, per Benzinga, and markets priced about a 45% chance of another Fed hike on October 28. Higher yields tend to hit richly valued growth stocks hardest, and chips have been among 2026's biggest winners. Our CPI report has the full numbers.

China memory worries. The memory slide started earlier this week after China's CXMT said it had made progress on a new memory chip design. The Roundhill Memory ETF fell about 5% Tuesday and South Korea's KOSPI dropped more than 5%, with SK Hynix and Samsung losing ground, according to reports. Our earlier midday recap covers that move.

Doubts about AI spending. Broadcom CEO Hock Tan voiced caution about AI investing this week. On Wednesday, CoreWeave fell 13.8%, DigitalOcean 10% and Oracle 6.5% by late morning, according to Benzinga, pointing to broader unease about the cost of building AI capacity.

What is holding up

Not every chip-related stock fell. GlobalFoundries rose about 5% by late morning after being selected to operate two new fabs in New York under a U.S.-Japan initiative, per Benzinga. ASML's earnings also gave the sector a supportive backdrop: the company beat estimates and said customer demand will exceed its capacity through 2028 (our ASML recap), though that has not stopped the selling in the stocks above. Broader markets were softer as well, with the S&P 500 down about 0.7% and the Nasdaq 100 down about 1.0% in late-morning trading.