Market Turmoil: Tech Stocks Take a Hit
Rising Interest Rates Spark Sell-Off
The technology sector is reeling as investors take profits on their 2024 winners and dump more speculative names amidst rising interest rates. Nvidia, a leader in the space, plummeted nearly 3%, while Palantir and Rigetti Computing, a quantum computing winner, dropped 4% and 29%, respectively. Last year’s Nasdaq winner, AppLovin, also saw its stock price decline by about 3%.
Bond Yields on the Rise
The 10-year Treasury yield reached its highest point since late 2023 on Monday, casting doubt over the Federal Reserve’s plans to cut interest rates this year. This comes on the heels of a strong jobs report on Friday, which has investors questioning the Fed’s next move.
Tech Giants Feel the Pain
Other prominent technology stocks also took a hit on Monday, with Tesla falling 3%. Semiconductor stocks, including Broadcom and Advanced Micro Devices, slumped about 2%, while Micron Technology declined about 3%. Quantum computing stocks, which had seen a boost from last year’s positive Alphabet chip announcement, also plummeted, with D-Wave dropping over 16% and IonQ shedding 11%.
Last Week’s Losses Continue
The sector’s sell-off began last week after Nvidia CEO Jensen Huang suggested that useful quantum computers are still decades away. Megacap tech names, including Apple and Microsoft, edged down about 1%, while Meta Platforms, Alphabet, and other tech giants fell slightly.
What’s Next for Tech?
As investors navigate this uncertain landscape, one thing is clear: the technology sector is in for a bumpy ride. With interest rates on the rise and profit-taking in full swing, it remains to be seen how these tech giants will recover. One thing is certain, however: investors will be keeping a close eye on the Fed’s next move and its impact on the market.
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