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The markets are hoping that positive earnings results from the megacap technology companies will lift the stock market from its recent doldrums. The surge in the 10-year T-note yield to above 5% for the first time since 2007 has weighed heavily on technology stocks, with the S&P 500 ($SPX) (SPY) and Nasdaq 100 ($IUXX) (QQQ) stock indexes falling to 4-1/2 month lows on Monday. Investors are counting on solid earnings results from Alphabet (GOOGL) and Microsoft (MSFT) after today’s close to help restart a rally in equity markets.
With headwinds increasing and market uncertainty rising, investors have flocked to the relative safety of megacap technology stocks. Rising interest rates have made already stretched tech valuations look even more expensive just as the U.S. and China step up regulatory restrictions against each other. According to Bank of America, piling into big technology stocks remains the most crowded trade among fund managers.
