PanamaTimes

Saturday, Oct 24, 2026

Once Wall Street's stars, Big Tech falls back to Earth

Once Wall Street's stars, Big Tech falls back to Earth

After years of screaming higher, almost regardless of what the economy was doing, tech-oriented stocks are tanking and dragging down the rest of Wall Street. Many of these high-profile companies are still making billions of dollars in profits, and they continue to dominate the top of the rankings for most valuable businesses.
But two big changes have caused their stocks to come sharply back to Earth this year: Interest rates are rising, and expectations for their big continued growth suddenly look much more shaky.

Consider Netflix, whose stock more than tripled between early 2018 and its peak last November. It’s since lost virtually all that gain, dropping by more than two thirds this year alone for the worst loss in the S&P 500 as of Tuesday.

Similarly, Facebook parent Meta Platforms has lost close to half its value this year. Neither company falls into Wall Street’s “technology” classification; they’re instead categorized as “communications services” companies, along with many other internet-related stocks.

But they are both big parts of the Nasdaq composite index, along with such tech heavyweights as Apple and Microsoft. And the Nasdaq is on pace for its worst month since the 2008 financial crisis. Its drop of 20.2% for the year, as of Tuesday, was much worse than the 12.4% fall for the S&P 500 or the 8.5% slip for the Dow Jones Industrial Average, which has less of a tech focus.

The tech stocks in the S&P 500 are down 19.8% for the year through Tuesday, while communications services stocks in the index tumbled even more, 24.1%. The rest of the S&P 500 fell only 6.9%.

Tech-oriented stocks have struggled in large part because interest rates have shot to their highest level in years. The 10-year Treasury yield, for example, topped 2.90% recently after starting the year at 1.51%, though it’s receded in recent days. Yields have surged as the Federal Reserve prepares to raise short-term rates sharply to stamp out high inflation. It’s also planning other moves to push longer-term rates upward.

Higher interest rates are a drag on all kinds of investments. Now that a 10-year Treasury is close to offering a real return for the first time since the pandemic, after taking inflation into account, investors can make money by parking in safe bonds. That makes them less willing to pay high prices for riskier investments. High-growth, tech-oriented stocks are now taking the hardest hits because their prices earlier soared the highest.

Netflix, for example, began 2022 with a stock price trading at 45.6 times its expected earnings per share over the ensuing 12 months. That was more than double what investors were willing to pay for each $1 of expected earnings from the overall S&P 500.

Investors were comfortable paying such high prices for Netflix and tech stocks generally when interest rates were super-low. They also were willing to stretch for stocks of companies that were able to grow strongly, even when the overall economy was hurting.

But now rates are rising and continued growth looks less assured. Netflix recently reported a drop in its number of subscribers for the first three months of the year, for example, with more losses expected in the spring. People have more options for entertainment now that pandemic restrictions are being relaxed.

Google’s parent company Alphabet said Tuesday that its revenue growth last quarter slowed to its lowest pace since 2020. Analysts highlighted slowdowns in search and at YouTube in particular.

Stocks of semiconductor companies have also been big laggards this year, partly on worries that demand for smartphones, personal computers and other hardware will flag after sales exploded during the pandemic. An index of semiconductor stocks has dropped 26.3% this year, a sharp fall after it soared more than 40% for three straight years.
Newsletter

Related Articles

PanamaTimes
0:00
0:00
Close
Advertising trick: Pepsi’s Harrier Jet Commercial Led to a $700,000 Court Fight
Why 2027 Could Be a Strong Year for Stocks—and Why the Forecast Is Fragile
Trump’s Top General Seeks an Exit Strategy From Iran War, Report Says
Brock Lesnar Retires From Wrestling, Closing a Career of Rare Athletic Range and Lasting Controversy
Trump-Era Policy Shifts Test the Boundaries of U.S. Institutions
Weight-Loss Drug Boom Tests the Limits of Prescription Advertising Rules
Breaking With the Past: One of the World’s Smallest Countries Changes Its Name
AI Is Remaking the US Economy, From GDP Growth to iPhone Prices
Cuba’s Grid Fails Again as Fuel Crisis Deepens
Nazca Lines Flight Crash Kills Thirteen as Peru Suspends Aerodiana
OpenAI Faces Demands for Full Disclosure After Models Breach Hugging Face
FIFA’s Private-Investment Plan for World Cup Rights Draws European Revolt
Why Americans Queue for $15 Ice Cream and a $100 Caviar Pint
OpenAI Sued After ChatGPT Allegedly Discouraged Emergency Care Before Near-Fatal Embolism
Miliband Sets Climate and International Law at Centre of UK Diplomacy
Trump Readies New Tariffs as Temporary Global Levy Nears Expiry
Morgan Stanley Builds a Wall Street Lead in AI Infrastructure Finance
High Prices Push Coffee Drinkers Toward Whole Beans and Home Brewing
Spain Defeats Argentina in Extra Time to Win Second World Cup
Venezuela’s Earthquake Devastation Turns U.S. Investment Opportunity Into a Thirty-Seven Billion Dollar Reconstruction Challenge
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
The Ledger Will Not Trust on Faith
Trump Administration Pressures Banks to Restrict Financial Access for Undocumented Immigrants
The Ten World Cup Finals That Defined Football History
Smartphones Are Getting More Expensive, Sales Are Collapsing, and Even Apple Admits: "Prices Will Rise"
The AI Race Enters Its Infrastructure Era
Colombia Influencer Dies After Cosmetic Procedure at Unlicensed Bogota Salon
A Quiet Bastille Day: France Grapples with World Cup Heartbreak and Leftover Fireworks
Spain in Ecstasy: "We Feel Unbeatable, We Taught the Whole World a Lesson"
On the Island That Did Not Yield to Trump, There Is No Electricity, and 10 Million Live in Darkness
World Cup Visitors Turn American Big-Box Stores Into Souvenir Stops
Anthropic Reengineers Agentic Architecture to Shift Autonomous Workplace Automation to the Cloud
Global Crisis Alert: Escalating Middle East Tensions and UK Political Upheaval
Japanese Technology Firm Fujitsu Launches Advanced Artificial Intelligence Tool for Corporate Disclosures
South Africa Officially Launches Nationwide Campaign for Highly Contested Local Government Elections
United Kingdom Commits Additional Funding for Unexploded Ordnance Clearance in Laos
Singapore Announces Stringent New Greenhouse Gas Regulations for Commercial Cooling Systems
Cambodia and Thailand Hold High-Level Border Security Talks at United Nations Headquarters
Myanmar Military Government and China Sign Major Agreement to Upgrade Media and Cultural Cooperation
Knife Attack at Swiss Train Station Leaves Three Injured in Suspected Act of Domestic Terrorism
Transnational Extortion Gang Threatens Canadian Police With Army of One Thousand Armed Operatives
Australia Imposes Forty-Two-Day Quarantine on Cruise Ship Passengers Following Deadly Hantavirus Outbreak
International Monetary Fund Unlocks Seven Hundred Million United States Dollars for Sri Lanka Following Economic Reforms
Australia Launches Record One Point Four Billion Dollar Lawsuit Against Chemical Giant 3M Over Contamination
China and Canada Foreign Ministers Meet in Ottawa in Effort to Stabilize Strained Diplomatic Ties
Indonesia Demands Urgent United Nations Security Council Reform Amid Escalating Global Conflicts
Extreme Weather Patterns Trigger Severe Drought in Madagascar and Destructive Flooding in East Africa
Indian State of Karnataka Faces Political Upheaval as Chief Minister Siddaramaiah Abruptly Resigns
Philippines and Japan Reaffirm Defense Ties as Crucial for Indo-Pacific Regional Stability
Norway Joins French Nuclear Deterrence Initiative in Major Shift for European Security Architecture
×