What higher-for-longer interest rates could mean for tech stocks

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After roaring higher for most of this year, the rally in tech stocks sputtered in August as investors grew increasingly worried about how long the Federal Reserve will keep interest rates high.

The pain in tech could continue. Strong economic data in recent months has investors betting that the Fed will keep interest rates higher for longer. Minutes from the Fed’s July meeting released earlier this month revealed that officials worried over whether inflation would cool further without additional easing in the economy and labor market.

While stocks, including tech, have rallied a little again in recent days on cooler-than-expected economic data, two pieces of important economic data later this week will test the market: The Personal Consumption Expenditures price index for July, expected Thursday, and Friday’s August jobs report. The US economy grew more slowly in the second quarter than previously estimated The US economy grew more slowly in the second quarter than previously estimated.

 

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