The Glass House – The Tech Industry Shows Cracks 💻

Table of Contents

The Glass House – The Tech Industry Shows Cracks

From the start of the year to date, the Nasdaq Composite, the 2,500 company-strong index, has yielded a return of an astounding 32%. In the last ten years, the gold standard for market performance, the S&P 500, has given a relatively strong 12.39% annually. Now why has the Nasdaq performed historic returns in only a matter of nine months? The Nasdaq’s portfolio is majority comprised of technology companies, holding over 55% of the weight of the index. With the rise in talks surrounding artificial intelligence, technology companies have gotten a favorable boost in value, with investors pricing in predictions for future performance strides made through AI. Even the tech-exclusive Nasdaq-100 Technology Sector has shown year-to-date returns of over 41%. As the past few weeks have shown losses for broader markets, several now fear these expensive tech stocks may be due for a value correction.

Alongside the gamble in AI, investors flooded heavily into tech stocks throughout 2023 in hopes of rate cuts soon to come. If inflation remained on a steady path downward, the Federal Reserve would eventually cut rates, which would in turn boost fiscal performances for several of these companies. However, hotter-than-expected reports of core-CPI and retail sales for August may sound a different tune on the state of the economy. Post-pandemic resiliency has driven a robust economy that has left several industries interest-rate insensitive in the interim. As per usual, interest rates and anything on the matter will have a significant effect on market performance, and this coming meeting may shift the tides for tech. Being down from 81% last month, investors are now nearly split 50-50 to a lower Fed target rate by June 2024.

Want to learn how to invest? Download the Invstr app, where you can play Fantasy Finance and manage a virtual investment portfolio or open a brokerage account and invest for real. Take our interactive investing course on Invstr Academy and become a better investor today!

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

Share:
More Posts
Load More
Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Facebook Twitter Youtube Instagram Snapchat Tiktok
learn
products
plan
Who we are
blog

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr Visa® Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community. The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results. Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such. Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.