Nasdaq Slides as U.S. 10-Year Yield Hits 4.789%, AI Multiples Reset

3-Line Briefing

• As the U.S. 10-year government bond yield rose to 4.789%, the Nasdaq fell 1.29% from the open. It was a session in which rising yields first cut growth-stock multiples.
• Japan’s 10-year yield also topped 3.0%, reaching its highest level since 1996. This is not just a U.S. issue but a global repricing of bond prices.
• For Korean investors, valuation sensitivity is rising again for semiconductors such as Samsung Electronics and SK hynix, as well as internet stocks. Energy and some defensive stocks are holding up relatively well.

What Is Changing

The Nasdaq’s decline signals a renewed rise in discount rates rather than an economic slowdown. When the U.S. 10-year yield breaks 4.789% and Japan’s 10-year yield tops 3.0% at the same time, the market recalculates the present value of future cash flows before earnings. This weakness therefore looks more like a rate repricing than a demand contraction.

What is already priced in is the direction of high rates. What is less priced in is where the price multiples of AI, semiconductor and platform stocks will bottom if these yields persist for several more days. Once the U.S. 10-year yield exceeds 4.8%, rebounds in growth stocks will be constrained more by rates than by earnings.

Middle East tensions and higher oil prices added to the pressure. Brent crude rose 2.21% and energy stocks gained 0.90%, while on the Nasdaq, declining stocks outnumbered advancers by 2.2 to 1. Money is moving first into defense rather than current returns.

Putting the Numbers in Context

According to Reuters’ opening figures on September 1, the Dow fell 0.19%, the S&P 500 dropped 0.66% and the Nasdaq slid 1.29%. Intraday losses narrowed, but the Nasdaq still remained down 0.8% and the S&P 500 down 0.5% based on Barron’s figures. A smaller loss does not mean a change in direction.

More important is the structure. Rising long-term yields can boost margin expectations for financial stocks, but across the broader indexes they pressure long-duration assets first. That is why semiconductors and internet stocks are shaking first in the Korean market, while refiners and energy-related stocks show relatively stronger defense.

Stocks Benefiting and Suffering

• NVIDIA, AMD, Intel: Even with high AI expectations, higher discount rates applied to distant future cash flows can weigh on prices first.
• Microsoft, Broadcom: Their earnings fundamentals are strong, but in a rising long-term-rate environment, elevated valuation ranges become shorter-lived.
• Chevron, Exxon Mobil: When oil and rate uncertainty rise together, defensive capital flows in first.
• Samsung Electronics, SK hynix: If multiple compression in U.S. semiconductor stocks reduces foreign investors’ risk appetite, the same logic spreads to major Korean IT stocks.

Risk Check

• If the September 4 nonfarm payrolls report and September 11 CPI exceed expectations, additional rate pressure will build.
• If Brent crude continues rising, inflation concerns will intensify again.
• If the 10-year yield falls back below 4.7%, pressure on growth stocks could ease for a time.
• If Japan’s long-term yield settles above 3%, global capital reallocation toward bonds will last longer.

Bottom Line

This market is closer to a rate-driven session than an earnings-driven one. If yields rise further, AI and semiconductor multiples will contract first; if rates stabilize, losses could quickly retrace. The next checkpoints are September 4 employment data, September 11 CPI and whether the U.S. 10-year yield settles at 4.8%.

Frequently Asked Questions

Why is the Nasdaq more sensitive to interest rates?

The Nasdaq has a high concentration of growth stocks whose value depends heavily on future earnings. When long-term yields rise, the present value of the same earnings is reduced more sharply. That is why multiples adjust first even when earnings are unchanged.

Why are energy stocks holding up relatively well?

When oil prices rise, expectations for energy companies’ cash flows improve first. In the September 1 session, Brent crude rose 2.21% and energy stocks gained 0.90%. That gave defensive money a reason to move in.

What should Korean investors watch?

Investors should assess rebounds in Samsung Electronics, SK hynix and Korean internet stocks through the lens of rates before looking at the indexes. Valuation pressure will ease only if the U.S. 10-year yield, the KRW/USD exchange rate and next week’s CPI all turn lower together.

This article is automatically summarized and analyzed based on the original news report. View original (WSJ)