Nvidia Shares Drop as Hotter US Inflation Data Triggers Broad Semiconductor Sell-Off

Shares of NVIDIA Corporation (NVDA) declined 2.70% to $222.30 on Wednesday, marking the stock's fifth loss in six trading sessions. The drop coincided with a widespread sell-off across semiconductor equities, as the Philadelphia Semiconductor Index slipped over 3%. Other chipmakers also saw losses, including Advanced Micro Devices (AMD), which fell 4%, and Micron Technology, which lost around 1.75%.

The market retreat followed the release of the US consumer price index report for September. While monthly inflation met forecasts with a 0.6% rise, annual inflation accelerated to 3.7% and core inflation came in higher than anticipated. The hotter figures pushed the 10-year Treasury yield up by more than seven basis points and boosted market expectations of an October Federal Reserve interest rate hike to 43.7%. Higher bond yields raise borrowing costs and make fixed-income investments more attractive relative to high-valuation growth stocks.

Investors are monitoring elevated energy costs, broad AI infrastructure debt requirements, and emerging competition from Chinese memory manufacturer ChangXin Memory Technologies. Separately, Nvidia pledged $250 million in computing resources over five years toward UK artificial intelligence safety research, highlighting ongoing commitment to technology safeguards even as capital spending across the sector remains robust.