The Nasdaq 100 index, which has a large proportion of high-tech stocks, has entered an adjustment phase on the 20th, with the rate of decline from the highest price set on November 19 last year exceeding 10%. Soaring US Treasury yields have made soaring growth stocks less attractive.
The Nasdaq 100 index fell 1.3% from the previous day to end at 14846.46. The sharp fluctuations in growth stocks continued for 20 days, and the Nasdaq 100 index temporarily rose by 2% and then suddenly fell at the end of the game. The Nasdaq Composite Index has entered an adjustment phase on the 19th.
Amazon.com had the largest decline in large tech stocks on the 20th. It fell 3% from the previous day and ended at the lowest price since March 2021.
U.S. financial authorities will raise interest rates by more than 0.25 points in March to curb inflationsquareSince then, US Treasury yields have skyrocketed, with US 10-year Treasury yields surpassing 1.87% on the 18th, the highest level since January 2008.
The reason why US high-tech stocks have been on a downward trend since the beginning of the year is the shift of funds from growth stocks to business cycle stocks such as energy and finance that will benefit from economic recovery and rising interest rates. Small and medium-sized fast-growing tech companies that are highly dependent on capital markets for financing are particularly hurt by concerns that they are vulnerable to monetary tightening.
“Growth stocks, especially high-value and low-quality stocks, have been hit this year,” Eric Bailey, executive managing director of wealth management at Steward Partners Global Advisory, said in an interview. “As US monetary authorities move to rate hikes, investors will shift to value and business cycle stocks, so this year’s US stock market returns are likely to be more modest.”
Original title:
Nasdaq 100 Enters Correction as Tech Stocks Resume Slide(excerpt)