Tech Stocks Tumble as Rising Rates Spark Investor Sell-Off

NEW YORK — Technology stocks favored by retail investors plummeted Monday as rising interest rates and profit-taking triggered a sell-off in speculative and high-growth names. The Nasdaq Composite, a benchmark for tech-heavy stocks, saw significant declines, with quantum computing and semiconductor sectors among the hardest hit.

The sell-off followed a surge in bond yields, with the 10-year Treasury yield reaching its highest level since late 2023. A stronger-than-expected jobs report on Friday raised doubts about the Federal Reserve‘s ability to cut interest rates further this year. “While tech stocks made major gains as interest rates dropped last year, both Wall Street and Main Street have grave doubts about any further rate cuts by the Fed,” said Greg Bassuk, CEO of AXS Investments. He added that Friday’s report “cemented” those concerns.

Among the notable decliners, quantum computing stocks, which had surged last year following positive announcements from Alphabet, saw sharp drops. Rigetti Computing plunged 33%, while IonQ lost 15%. Semiconductor stocks also faced pressure amid new U.S. government restrictions on AI chip exports. Nvidia, a key player in the sector, dropped 4%.

Keith Lerner, co-chief investment officer at Truist, noted that the market’s general uptrend remains “still intact” but is undergoing a reset. “That’s a necessary part of a corrective phase in our view, and we are likely further along in this correction than many investors recognize since many stocks peaked in late November, early December,” Lerner said.

Other major tech stocks also declined, with Meta and Apple each dropping more than 1%. The broader semiconductor sector edged down less than 1%, reflecting investor caution in the face of rising rates and regulatory challenges.