Tech Stocks Take a Hit: What's Happening with Nvidia and Palantir?

Monday was a rough day for tech stocks, with big names like Nvidia, Palantir, and Rigetti Computing seeing significant drops. Nvidia fell by nearly 4%, Palantir by 3. 5%, and Rigetti Computing plummeted by 10%. Even last year's Nasdaq winner, AppLovin, wasn't spared, with a 3% loss. This sell-off happened because investors decided to cash in on their 2024 gains and move away from riskier stocks as interest rates started to rise. The 10-year Treasury yield hit its highest point since late 2023, adding to the pressure. A strong jobs report from Friday cast doubt on whether the Federal Reserve would continue lowering interest rates this year. Greg Bassuk, CEO of AXS Investments, pointed out that while tech stocks surged as interest rates dropped last year, both Wall Street and Main Street now have serious doubts about further rate cuts by the Fed. This sell-off follows a tough week for many key tech and quantum computing stocks. Keith Lerner, co-chief investment officer at Truist, noted that top performers usually take a hit during corrective phases. He sees this as a necessary part of the market's reset process. Many investors might not realize how far along this correction is, as many stocks peaked in late November or early December. Other notable tech stocks also dropped, with Tesla down more than 2%. Semiconductor stocks like Advanced Micro Devices and Micron Technology fell by 1% and 6%, respectively. Quantum computing stocks that benefited from last year's positive Alphabet chip announcement also took a hit. D-Wave dropped over 17%, and IonQ lost 1. 5%. This sector sold off after Nvidia's CEO, Jensen Huang, suggested that useful quantum computers are still decades away.