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Technology stocks popular with retail investors tumbled Monday as investors took profits on their 2024 winners and dumped the more speculative names in an environment of rising interest rates.
Nvidia slumped 3%. Palantir dropped 4%, while quantum computing winner Rigetti Computing plunged 22%. Last year’s Nasdaq winner AppLovin also sold off about 2%.
Palantir, 1 day
The sell-off comes amid a rise in bond yields, with the 10-year Treasury yield touching its highest level since late 2023 on Monday. A strong jobs report Friday cast doubt over whether the Federal Reserve will continue cutting interest rates at all 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 AXS Investments CEO Greg Bassuk, adding that Friday’s report “cemented” those concerns.
Monday’s moves also follow a losing week for many key tech and quantum computing names, with Truist’s Keith Lerner noting that leaders eventually fall in a corrective phase. The co-chief investment officer views the general market uptrend as “still intact” but 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,” he said.
Other famed technology stocks also dropped Monday, with Tesla last down about 1%. Semiconductor stock Micron Technology declined 5%.
Quantum computing stocks that got a boost from last year’s positive Alphabet chip announcement also plunged, with D-Wave plunging 28%. IonQ lost 10%. The selloff came on the heels of commentary from Meta CEO Mark Zuckerberg that echoed Nvidia CEO Jensen Huang’s commentary last week suggesting that useful quantum computers are decades away.
Rigetti Computing, 1 day
