Oil, yields pressure memory stocks ahead of CPI

Shares of memory companies slid after US oil futures topped $100 a barrel and the 10-year Treasury yield climbed above 4.9%, stoking investor concern about inflation and higher borrowing costs ahead of Friday’s consumer price index release.

Micron and SanDisk each fell about 4%, SK Hynix dropped more than 5%, Seagate declined 2.3% and Western Digital was down about 3.7%. The Philadelphia Semiconductor Index lost 2.7%. The S&P 500 and Dow each fell roughly 0.6% and the Nasdaq lost about 0.7% as energy and bond moves weighed on growth-oriented technology names.

West Texas Intermediate futures for October moved above $100 and Brent for November climbed past $105. Traders said geopolitical tensions were tightening oil markets, and the oil gains coincided with a rise in Treasury yields to levels not seen since November 2023.

The August producer price index rose 0.4% month-over-month and 5.4% year-over-year, keeping wholesale inflation above the Federal Reserve’s 2% target. Futures markets priced in about a 74% probability of a quarter-point rate increase at the Fed’s Sept. 16 meeting.

Stephen Coltman, head of macro at 21Shares, wrote that higher oil and Treasury yields increase market risks ahead of the CPI reading. PVM analyst John Evans pointed to ongoing US-Iran tensions as a factor behind elevated energy prices and a tighter oil balance.

Some market data pointed to renewed investor interest in memory stocks after a quiet summer. Goldman Sachs flagged early technical breakouts for Micron and SanDisk. Prime brokerage figures showed gross leverage among US long/short hedge funds near the 27th percentile of the past year and net leverage near the fourth percentile. The CBOE Semiconductor ETF Volatility Index has fallen to about 36 from roughly 65 in July, indicating lower expected swings for the sector.

Analysts also cited improving memory fundamentals. Susquehanna projects average DRAM prices to rise about 50% sequentially this quarter and another 20% in the fourth quarter of 2026. NAND flash prices are forecast to climb about 60% sequentially this quarter and 25% the next quarter. D.A. Davidson’s Gil Luria noted demand for high-bandwidth memory used in AI systems exceeds current supply by more than two times.

Micron holds roughly 24% of the DRAM market and about 15% of the NAND market. The company is scheduled to report fiscal fourth-quarter results on Sept. 30, with analysts expecting revenue near $50.8 billion and non-GAAP earnings around $31.28 per share.

Over the past year Micron has risen more than 600% and SanDisk more than 2,200%. Trailing earnings multiples remain below the broader technology average, at about 21 times for Micron and 20 times for SanDisk versus roughly 32 times for the tech sector. Market participants flagged the risk that added capacity could create a supply glut if demand weakens.