Tech Giants Dragged Down by Rising Interest Rates

The US stock market experienced a significant downturn on Monday, with major technology stocks leading the decline. The Nasdaq 100 fell by about 1.6%, while the S&P 500 lost nearly $700 billion in market value during the day.

Several large-cap technology companies were hit hard, including Google (down 1.08%), Microsoft (1.31%), Amazon (1.41%), Meta (3.83%), and AMD (3.14%). Micron also declined by 2.92%, while Oracle lost 2.45%. Even the largest technology names were lower.

The decline in these stocks is partly due to a sharp rise in borrowing costs, with the 10-year Treasury yield reaching around 5.26% and the 30-year yield reaching about 5.57%. This increase in interest rates can make future earnings appear less valuable, affecting expensive growth stocks.

The semiconductor sector was particularly hard hit, with AMD and Micron leading the decline. This is partly due to their close ties to artificial intelligence spending and market expectations for this area. Meta's decline of 3.83% stands out as it shows that selling has reached beyond chipmakers, affecting companies like Oracle associated with AI infrastructure buildout.