Big Tech stocks have been caught in a turbulent market. News of a 50-basis-points interest rate hike has weighed on high-growth shares, leading to a major selloff in each of the major indices. Today, though, it seems tech stocks were ready for a (slight) rebound.
Amazon (NASDAQ:AMZN) closed up just slightly, at 0.06%. Other tech stocks have enjoyed a better day. Tesla (NASDAQ:TSLA) gained 1.64% while Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) gained 1.33%. At the top of the pack is Microsoft (NASDAQ:MSFT), which closed up nearly 2% higher.
All four stocks are still in the red for the week.
Tech Stocks Fall on Interest Rate Fears
Wall Street expected that stocks would fall after the latest interest rate hike. What did surprise some investors, though, was the fact that some tech stocks initially rallied in the face of the news. That was short lived though, as tech giants collectively lost over $1 trillion in three trading days.
CNBC reports that “Investors now have less interest in what drove business during a strong bull market in recent years, including during the pandemic, and are now pushing more money toward safer pockets of the market.”
In addition to an ongoing sell off, we are seeing tech companies lay off employees. Layoffs often signal weakness to investors, even if they mean cutting operating costs. Both Meta Platforms (NASDAQ:FB) and Uber (NYSE:UBER), two companies that recently doubled down on layoffs and hiring freezes, both gained today.
Given all the turbulence that the tech sector has seen, today’s slight recovery is significant.
What Comes Next
The bottom line for investors is that this is not the time to panic about tech-sector investments. Industry leaders are poised to keep fighting. Experts are correct that tech stocks are bracing for an “age of uncertainty,” but that doesn’t mean they won’t rise again. They are already proving that they absolutely can.
Anyone who is still worried about what the future means for tech stocks should remember what InvestorPlace analyst Luke Lango has said about the opportunities that a Fed rate hike can bring for high-growth stocks and specifically, for the tech sector.
On the date of publication, Samuel O’Brient did not hold any position (either directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.