Key Highlights

● Intel closed at $91.15 after tumbling as chipmakers extended a long losing streak.

● Higher borrowing costs and Fed Chair Warsh's price-stability focus weighed on semiconductor stocks.

● All 30 PHLX Semiconductor Index members fell, and the index finished at 11,137.29.

● Intel reports third-quarter results Oct 29, a day after the Fed's Oct 28 rate decision.

A steep slide for Intel

Intel (NASDAQ:INTC) tumbled on Friday, closing at $91.15 as chipmakers extended a long losing streak on the S&P 500. Market reports listed Intel among the session's heaviest decliners in the semiconductor group, while another report showed a smaller drop during the afternoon, so reports differed on the size of the move.

The decline in Intel and peers such as Lam Research (NASDAQ:LRCX), Amkor Technology (NASDAQ:AMKR) and Kulicke and Soffa (NASDAQ:KLIC) was tied to rising borrowing costs and remarks from Fed Chair Kevin Warsh that put price stability first. Market commentary also described a rotation out of chipmakers and into cash-generating blue chips.

Even after Friday's drop, Intel shares have rallied strongly this year, though they remain well below their 52-week high.

Warsh keeps markets guessing

Warsh spoke at an IMF gathering in Bangkok and declined to preview the Fed's October decision. "I don't prejudge meetings," he said. Reports indicated that he will not pre-announce decisions for the remaining two meetings of 2026 and said global performance has broadly matched Fed expectations since the September rate hike.

The Fed raised rates a quarter point in September, its first increase in three years. Wednesday's hotter-than-expected consumer price report briefly lifted the odds of another hike in October. Those odds then fell sharply, though futures markets still price a hike by December, and Bank of America still expects one in October, according to market data.

Higher rates matter for chipmakers in two ways. They raise the cost of financing expensive factories, and they lower the present value of future profits, which tends to hurt growth-oriented stocks. The 10-year Treasury yield eased to roughly 5.1 on Friday but topped 5.3 earlier in October, its highest since 2002.

The whole chip sector fell

Intel had plenty of company. All 30 stocks in the PHLX Semiconductor Index fell, and the index finished at 11,137.29. Advanced Micro Devices (NASDAQ:AMD) and Arm Holdings (NASDAQ:ARM) sank, Micron Technology (NASDAQ:MU) slid and Broadcom (NASDAQ:AVGO) fell. Reports disagreed on the length of the streak, with some counting an eighth straight decline and others describing a ninth.

Behind the selling was a broader debate over how the AI build-out will be paid for. Market commentary said more than $1 trillion was erased from semiconductor and AI-related stocks over the week. Memory makers also faced worries about Chinese competition, particularly progress at CXMT on advanced DRAM.

Market backdrop

The S&P 500 fell 84.62 points to 7,659.44 after opening higher, ending a 55-session run without a steep daily decline. The Nasdaq Composite dropped 572.99 points to 26,140.03, and the Dow Jones Industrial Average slipped 175.28 points to 52,002.41. Energy, utilities and consumer staples gained as investors rotated toward defensive sectors, and Brent crude climbed to $109.86 a barrel.

Data on Friday showed September import and export prices rose more than expected, while industrial production beat forecasts. Earlier in the week, the September consumer price index came in hotter than economists expected.

Intel Earnings Land Next to Fed Test

Intel reports third-quarter results on Oct 29, the same day the PCE inflation report and the first estimate of third-quarter GDP are due. Before that, Lam Research and Texas Instruments (NASDAQ:TXN) report on Wednesday, Oct 21. The Fed's next rate decision lands on Oct 28, with markets watching for any sign of a second hike.