Bond Market Warnings Send Tech Stocks Reeling

The global bond market is sending a strong signal to technology investors that they can no longer ignore. The U.S. 10-year Treasury yield has hit 4.80%, its highest level since January 2025, and similar spikes are being seen in Britain's 10-year gilt yields at 5.21% and Australia's 5.14%. Even Japan, which had borrowed for almost nothing for a decade, is now paying 3.00%.

The trigger for this move came from central bankers, who have signaled that inflation has not slowed meaningfully and that there is still work to be done. Traders are now putting the odds of a September rate hike near 66%, with the European Central Bank also likely to raise interest rates in September after eurozone inflation came in at 3.3% in August.

Technology stocks are feeling the heat, with the Nasdaq Composite falling 0.7% and the S&P 500 losing 0.4%. The tech-heavy Invesco QQQ Trust is down 1%, and five Nasdaq 100 names have fallen more than 5%: CrowdStrike Holdings Inc., Astera Labs Inc., Lumentum Holdings Inc., Axon Enterprise Inc., and Teradyne Inc.

The bond market's repricing of every maturity at once, rather than a steepening of the curve, is raising concerns for tech companies. These firms carry more duration risk due to their reliance on profits expected many years from now, which are discounted using current interest rates. Higher yields now raise the cost of borrowing and compress the valuation of future profits.