Could Tech Stocks Break if Yields Continue to Rise From Here?

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Stocks Analysis by Fawad Razaqzada covering: Nasdaq 100, S&P 500, iShares Core S&P 500 ETF, SPDR® S&P 500. Read Fawad Razaqzada's latest article on Investing.com

has been able to hold its own relatively better than many other global indices so far this week. The big technology stocks have been able to hold up the market, while small- and medium-caps have sold off.

Faced with extra risk in a challenging macro environment, yield-seeking investors would rather earn a decent, fixed, return, than hope for uncertain dividend payments or further capital appreciation in stocks, with overstretched valuations.With the bond markets continuing to sell-off, lifting yields and the dollar, this should further diminish the attractiveness of assets that pay low or zero interest and/or dividends.

What’s more, if oil prices now resume higher then this will likely push up inflationary pressures once more, encouraging major central banks like the Fed to hold their contractionary monetary policies in place for longer. Perhaps this may be why we are seeing continued pick up in long-term bond yields. Again, this won’t be good news for growth stocks.were coming off their earlier highs, pointing to a lower open on Wall Street. Keep an eye on key resistance between 14920 to 15065 range.

 

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