U.S. technology stocks are losing their safe-haven appeal, raising concerns about broader market stability during heightened global uncertainty.
After leading a multi-year bull run, megacap tech names are now under pressure, with investors reassessing their role as defensive assets.
The S&P 500 tech sector has dropped nearly 8%, matching the broader market decline, while the Nasdaq has entered a technical correction.
Major players including Meta and Alphabet have posted steeper losses, reflecting increased selling across high-growth, liquid equities.
Analysts cite profit-taking, as investors rotate out of top-performing stocks after years of strong gains, locking in significant returns.
Rising Treasury yields are also weighing on valuations, particularly for tech firms whose prices rely heavily on future earnings expectations.
Additional pressures include AI-driven disruption concerns, heavy capital spending, and regulatory risks, creating a challenging environment for the sector.
Despite the downturn, falling valuations and strong earnings forecasts continue to support tech’s long-term outlook, offering renewed entry opportunities for investors.
