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Market Update

Busting the Tech-Stock, Bond-Yield Connection Myth

While rates matter to technology stock valuations, they haven't been driving performance.

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In late September 2021, technology stocks were rolling over, a summertime rally having suddenly deflated. Market pundits and investors cited a laundry list of causes for the sell-off, but one reason seemed to make the rounds more than others: a jump in Treasury bond yields was leading investors to ditch tech stocks.

"It really doesn't matter what Nasdaq stock we're talking about," said a well-known television markets pundit. Whenever Treasury bond yields rise, tech stocks fall, he and others claimed. "The linkage is so clear," he said.

Tom Lauricella does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.