The index fell 9% in January, its biggest monthly drop since March 2020. The selloff came on the back of a surge in U.S. Treasury yields, which hurt pricier technology stocks that are valued on future growth expectations. The industry rout this year follows an extended period of outperformance related to both pandemic-era growth and low rates.
“What we’ve seen so far this year is a reversal on both fronts,” said Carlos Garcia-Tunon, senior managing director and head of fundamental equity at MacKay Shields. “There’s an expectation of economic normalization following the pandemic, and also of rising rates. So we’ve seen tech meaningfully underperform.”best two-day rally
since 2020 as earnings beats — including from Apple Inc. last week — helped somewhat lessen the Fed blow. Despite the positive end to the month, strategists say it might be too soon to bet the worst is over. For Morgan Stanley’s Michael Wilson, the volatility and intraday swings resemble “classic bear market action.” Indeed, gyrations in futures contracts were a common sight last week as nervous growth-stock investors hunted for the bottom after one of the most brutal selloffs since March 2020.
What’s more, Bank of America Corp. highlighted on Friday that 2,648 out of 3,682 Nasdaq stocks were now in a bear market and nearly half of them were down more than 50% from their 52-week highs.
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