Tech-heavy index down as Big Tech earnings disappoint

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The tech-heavy index is down 23% year-to-date as Big Tech earnings fail to meet expectations. Google parent company misses on cloud revenues, causing investors to reevaluate their reliance on mega-cap technology stocks. While Amazon and Microsoft stocks have performed well, the macroeconomic environment is becoming more challenging with high interest rates.

The tech-heavy index, dominated by the Magnificent Seven and sensitive to interest rate movements, is down about 23% year-to-date. With heightened geopolitical risks and rising Treasury yields, investors are looking for results in stocks that once rode to new heights based on potential — and the Big Tech earnings haven't delivered.– but the Google parent missed significantly on cloud revenues, coming in at $8.41 billion compared to analysts' expectations of $8.6 billion.

Additionally, AI, while an eventual tailwind, has not yet been fully monetized in any way, shape or form. That process is going to take time. Take Oracle -- Russia’s central bank raised interest rates far more than forecast, alarmed that inflationary risks are still on the rise even after a reimposition of capital controls took pressure off the ruble.

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