Tech stocks bore the brunt of the recent market correction, as lofty valuations and increasing interest rates caused investors to adopt a bearish outlook. The benchmark tech-heavy Nasdaq Comp index has been under pressure since last November and has declined 8.3% year-to-date. While the index has recovered slightly over the past two weeks, tech stocks are expected to remain under pressure due to the Fed’s aggressively hawkish tilt. Furthermore, the yield curve inverted yesterday, indicating concerns about an impending recession.
However, with the rapid digitization of virtually every industrial sector and a continuing remote working culture, fundamentally sound tech stocks have rosy long-term growth prospects. As COVID-19 cases rise across several parts of the world, the tech industry will likely regain its momentum.
