Why do tech stocks sell off?

Technology stocks led a sharp Monday selloff as inflation expectations continued to drive a staggering increase in yields on the ten-year Treasury—undercutting lofty stock valuations and hitting longtime market leaders like Apple and Facebook the hardest.

Are tech stocks a good investment?

Technology stocks are perennially one of the hottest areas of the stock market. Investors closely follow this sector because of its track record of scorching returns and the potential for more in the future. So it can be worth keeping an eye on tech stocks and tracking the hot performers.

Are tech stocks high risk?

Technology stocks may be especially volatile. International investing entails greater risk, as well as greater potential rewards compared to U.S. investing. These risks include political and economic uncertainties of foreign countries as well as the risk of currency fluctuations.

Why do investors sell off?

Sell-offs occur based on the principle of supply and demand. If a large number of investors decide to sell their holdings without any compensating increase in buyers, the price of that investment will fall. For contrarian investors, sell-offs can present an opportunity to buy at low prices.

What is stock correction territory?

A stock market correction is a sudden drop in the value of stocks, usually by more than 10\% from their most recent high (according to common indexes like the Dow Jones Industrial Average).

What is a tech stock?

Tech stocks refer to any stock involved in the technology sector, from semiconductor producers to software providers. Tech stocks are often a leading indicator for the economy and the stock market.

Why do higher yields hurt tech stocks?

Higher rates means future profits are worth less today, and that’s hurting fast-growing technology stocks. Fast-growing technology stocks have been slammed because of rising bond yields amid expectations for stronger economic growth. Less money going into bonds is expected to lower their prices and raise their yields.

Are tech stocks overvalued?

Experts and market watchers believe tech shares are currently overvalued and this once again gave Nasdaq a shock as the index slumped as much as 3 percent after statements by Federal Reserve officials.

Why will rising interest rates hurt tech stocks?

The market is worried interest rates will be shooting up and the Federal Reserve may not be able to control it. Why would a rise in interest rates hurt stocks, particularly high-flying technology stocks? It has to do with the way Wall Street values stocks.

Why are tech stocks under pressure again?

The U.S. Senate finally passed a $1.9 trillion COVID-19 relief bill over the weekend and stocks are broadly moving higher at the start of the week. However, technology stocks are once again under pressure as bond yields continue to rise — with investors rotating from assets perceived as having stretched valuations.

Are techtech stocks in a correction?

Tech stocks are in a correction. The Nasdaq 100, the largest 100 nonfinancial stocks in the Nasdaq, is 10\% off the historic high it hit just three weeks ago, but many big names are down close to 20\%. What’s going on?

Are tech stocks under pressure from rising bond yields?

However, technology stocks are once again under pressure as bond yields continue to rise — with investors rotating from assets perceived as having stretched valuations. The yield on the 10-year Treasury TMUBMUSD10Y, 1.285\%, up 64 basis points this year through Friday, rose 2 basis points to 1.589\% on Monday.