EDITOR'S NOTE
Tech stocks took the brunt of the impact from higher interest rates on Tuesday, with some of the market's biggest names seeing significant declines and dragging down the broader market.
Shares of Facebook slid 3.6% and Google-parent Alphabet fell 3.7%. Apple and Amazon each dropped more than 2%. The Invesco QQQ Trust, which includes many of the biggest names on the Nasdaq, ended the session 2.8% lower.
The size of those stocks means that the moves took a serious bite out of the major indexes, which a strong day for the relatively tiny energy sector could not offset.  Tech and other high-growth sectors often see a negative reaction when interest rates rise. Indeed, higher rates make the future earnings prospects of those companies less attractive to investors.
However, while tech stocks often fall when rates and inflation fears rise, that doesn't always mean the underperformance will last long.
"As interest rates rise, the importance of nearer-term cash flows for valuations rises, resulting in relative underperformance for longer duration stocks, like Tech, at least in the near term," Chris Hussey from Goldman Sachs said in a note on Tuesday.
"Looking further out, this dynamic is unlikely to be sustained, however, as technological disruption and adaption should continue to generate new growth opportunities for investors," he noted.
TOP NEWS
TOP VIDEO
CNBC PRO
SPECIAL REPORTS
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selasa, 28 September 2021
Nasdaq’s worst day since March | Treasury Secy Yellen on debt limit | Goldman’s rising rate play
Langganan:
Posting Komentar (Atom)
Tidak ada komentar:
Posting Komentar