Key Highlights

● Teradyne slipped with the sector, and its decline was modest next to the sharpest moves.

● The company makes automated test equipment that chipmakers use before shipping semiconductors.

● TSMC's $46.72 billion quarterly revenue topped guidance, and its 2026 capex plan held.

● Lam Research reports Oct 21, Western Digital Oct 22 and Intel Oct 29.

Moving with the sector

Teradyne (NASDAQ:TER) slipped on Friday, joining a broad decline in semiconductor and chip-equipment stocks on the S&P 500. Market data listed Teradyne alongside Vishay Intertechnology (NYSE:VSH), FormFactor (NASDAQ:FORM), Penguin Solutions (NASDAQ:PENG) and Applied Materials (NASDAQ:AMAT) among chip names trading lower, and indicated the stock moved with its sector.

No company-specific news was reported for Teradyne. Its decline was modest compared with the sharpest moves in the group, where Advanced Micro Devices (NASDAQ:AMD) and Arm Holdings (NASDAQ:ARM) sank and Intel (NASDAQ:INTC) tumbled.

Teradyne makes automated test equipment that chipmakers use to check that semiconductors work properly before they are shipped, along with industrial robots. Demand for its testers has been supported by the complex chips used in AI data centers, which require extensive testing. That ties its business to the same spending cycle that has driven chip stocks this year.

A sector-wide retreat

The selling across semiconductors was nearly universal. All 30 members of the PHLX Semiconductor Index fell, and the index closed at 11,137.29. One report said 57 of 60 stocks in a broader semiconductor basket were falling. Chip-equipment makers KLA (NASDAQ:KLAC) and Lam Research (NASDAQ:LRCX) both fell.

Reports disagreed on the length of the chip losing streak. Some counted an eighth straight decline, one described a ninth, and another called it the longest losing run since 2008.

Part of the pressure on chip stocks was tied to rising borrowing costs and Federal Reserve Chair Kevin Warsh's remarks putting price stability first. Warsh, speaking at an IMF gathering in Bangkok, declined to preview the Fed's October decision. "I don't prejudge meetings," he said.

Financing worries cloud AI demand

The broader backdrop was a reassessment of the AI trade. Market commentary said investors have moved from asking what AI can do to asking how its infrastructure will be financed, with debt-funded companies hit hardest. Reports said more than $1 trillion was erased from semiconductor and AI-related stocks over the week.

Memory chipmakers faced an extra worry about Chinese competition, after reports of progress at CXMT on advanced DRAM technology. Micron Technology (NASDAQ:MU) slid, and Seagate Technology (NASDAQ:STX) and Western Digital (NASDAQ:WDC) tumbled.

There were still signs of solid demand at the top of the supply chain. TSMC (NYSE:TSM) reported third-quarter revenue of $46.72 billion, above its guidance, and kept its 2026 capital spending plan at $60 billion to $64 billion, per market reports.

Market wrap

The S&P 500 fell 84.62 points to 7,659.44 after opening higher, ending a 55-session stretch without a steep daily drop. The Nasdaq Composite lost 572.99 points to 26,140.03, and the Dow Jones Industrial Average slipped 175.28 points to 52,002.41. All but seven of the 75 S&P 500 technology stocks closed lower, according to market data.

Energy, utilities and consumer staples gained as investors rotated into defensive areas, and Brent crude climbed to $109.86 a barrel. The VIX volatility index jumped 3.53 points to 19.99. The 10-year Treasury yield eased to roughly 5.1, though it remained near its highest levels since 2002.

Teradyne Tracks Lam Research Results

Chip-equipment demand will be in focus when Lam Research reports on Wednesday, Oct 21, alongside Texas Instruments (NASDAQ:TXN). The Federal Reserve announces its next rate decision on Oct 28, with the PCE inflation report and the first estimate of third-quarter GDP due Oct 29. Western Digital and Intel report Oct 22 and Oct 29, respectively.