Title: Market Update: Tech Stocks Plummet in August – Can They Bounce Back?
August has not started well for the stock market, with a sharp decline on Monday. July saw a shift away from tech stocks towards small caps, with tech stocks down 2% and small caps up 10%. The S&P 500 rose 1.1%, in line with historical averages.
The market shift is part of the “great rotation” away from overvalued mega-cap growth stocks towards small caps, mid caps, and value stocks. This trend was predicted due to unsustainable valuations in tech and AI stocks.
In July, five of the Magnificent Seven tech stocks saw declines, with only Tesla and Apple posting gains. As we enter August, there are concerns about a slowing economy and fears of a recession, potentially impacting tech stocks further.
The correction in tech stocks was expected and could lead to rate cuts in September. While a quick turnaround is unlikely in August, opportunities may arise in September and Q4 as rates begin to decrease. Stay informed and watch for potential investment opportunities in the coming months.