Tech Investing Shifts as Fed Hikes Rates, US-Iran Conflict Drives Oil Prices Higher
A trio of macro forces converged last week in the tech sector, changing how investors approach valuations. The first was a unanimous Federal Reserve rate hike on September 16 under new Chair Kevin Warsh, raising the federal funds rate by 25 basis points to 3.75-4.00 percent.
The second force is the ongoing US-Iran conflict at the Strait of Hormuz, where oil flows have fallen by three-quarters due to tanker strikes and Iran-backed Houthi attacks on Saudi energy facilities. This has embedded a persistent geopolitical risk premium in crude, with Brent crude trading above $99 per barrel.
The third force is the post-summit US-China trade truce extension, which will determine whether AI chip and rare-earth terms can move freely across the Pacific. Understanding how these forces affect tech valuations is crucial for investors right now.