Big Tech Stocks Lag Broader Market Amid Rising Yields
Big Tech stocks have underperformed the S&P 500 for nearly all of this year, according to Barclays. Stefano Pascale, head of U.S. equity derivatives strategy at Barclays, noted that Big Tech (Mag7 excluding Tesla) has lagged in performance since January and is on track for one of its worst annual performances since 2013. The underperformance appears driven by multiple compression amid rising Treasury yields, which have reached multi-year highs. The recent rise in U.S. bond yields—particularly the 10- and 30-year Treasuries—has historically pressured tech stocks due to their high valuations. This dynamic is reminiscent of 2022 when aggressive Fed tightening hurt Big Tech performance. However, Barclays also highlighted that AI-related financing could ease capital expenditure concerns for hyperscalers in the future. On Tuesday, the Invesco QQQ Trust fell more than 1% compared to a less than 1% decline in the S&P 500 index.
Tickers: $AAPL $AMZN $META $MSFT $NVDA $QQQ
Topics: Big Tech bond yields Fed policy stock underperformance