Are Tech Stocks Really Losing Their Shine? Debunking the Tech Bearish Trend

As we step into week 38 of the year, some news channels are adopting a bearish tone when discussing tech stocks in their morning conversations. However, it's crucial to examine whether this narrative aligns with the broader financial landscape. Exness has listed 22 technology stocks from various parts of the world, and recent data shows that 21 of them have experienced declines over the past seven days. Surprisingly, one outlier, China-based computer hardware manufacturer Canaan Inc (CAN), saw its stock rise by 4.44% from $1.80 (USD) to $1.88. While it's evident that tech stocks are facing downward pressure, the question remains: is this a significant and lasting trend shift, or merely negative hype that will dissipate in due course?

Tech Stocks in Global Indices

Over the past year, tech stocks have played a pivotal role in driving growth in U.S. indices. However, recent developments suggest that the dominance of the tech sector may be waning, potentially affecting broader U.S. indices. One factor contributing to this slump could be reports that Taiwan's TSMC (Taiwan Semiconductor Manufacturing Company), a major player in the chipmaking industry, has instructed key suppliers to delay the delivery of high-end chip-making equipment. Even chip designer Arm faced a downturn, with its stock sliding 4.5% just two days after its initial public offering, marking Wall Street's largest IPO in nearly two years.

The charts tell a similar story, with all major U.S. indices showing declines since September 15:

• US500: -1.31% from $4518 to $4459.
• US30: -0.98% from $35,031 to $34,687.
• USTECH100: -1.87% from $15,525 to $15,235.

Remarkably, the impact of the tech stock dip is significantly more pronounced on U.S. indices.

Asia Outperforms

While global tech stocks are facing headwinds, there is a glimmer of hope from Asia. Official data from China has revealed that retail sales and industrial production in August surpassed analysts' expectations. This positive news has particularly benefited consumer cyclical and basic materials stocks in Europe, as these sectors are closely tied to Chinese consumer spending.

Asian indices have not suffered the same fate as their American counterparts:

• Hong Kong's Hang Seng: +0.8%.
• Tokyo's Topix: +1%.
• China's CSI 300 index: -0.7%.

Although recent efforts by Beijing to stimulate the economy and stabilize financial markets have generated optimism, it's essential to recognize that one month of positive data does not guarantee a sustained path to recovery. As such, cautious trading strategies with tight Stop Loss and Take Profit levels are advisable for those considering trading HK50 in the coming month.

Conclusion: Tech Stocks Under Scrutiny

Tech stocks appear to be exhibiting vulnerability, but is this a cause for concern or merely a market correction? It's important to remember the adage, "buy the rumor, sell the news." Most media outlets react to market movements, and the factors driving tech stocks lower may have already played out. Furthermore, current financial articles have not provided a lasting explanation for this brief bearish episode, suggesting that it may be short-lived.

While whispers of a recession persist, only a few voices are proclaiming imminent doom and gloom. It's essential to consider that before shorting tech stocks, the recent dip may be nothing more than early investors capitalizing on a profitable year. It's too soon to declare that the tech bubble has burst or is in the process of deflating.

Here's a breakdown of how Exness-listed tech assets have performed over the past seven days.

Notably, only one of them experienced a drop exceeding 10%:

• Apple Inc. (AAPL): -2.43% from $179.36 (USD) to $175.01.
• Adobe Inc. (ADBE): -6.31% from $564.5 (USD) to $528.89.
• Automatic Data Processing, Inc. (ADP): -1.2% from $248.29 (USD) to $245.31.
• Advanced Micro Devices, Inc. (AMD): -5.77% from $107.71 (USD) to $101.49.
• Activision Blizzard, Inc. (ATVI): -0.49% from $92.27 (USD) to $91.82.
• Broadcom Inc. (AVGO): -2.29% from $871.64 (USD) to $851.68.
• BlackBerry Ltd (BB): -2.18% from $5.51 (USD) to $5.39.
• Baidu, Inc. (BIDU): -1.81% from $138.14 (USD) to $135.64.
• Electronic Arts Inc. (EA): -2.1% from $123.04 (USD) to $120.46.
• Fortinet, Inc. (FTNT): -6.22% from $65.07 (USD) to $61.02.
• Alphabet Inc. (GOOGL): -0.51% from $138.1 (USD) to $137.4.
• International Business Machines Corporation (IBM): -1.61% from $148.38 (USD) to $145.99.
• Intel Corporation (INTC): -2.52% from $38.86 (USD) to $37.88.
• Intuit Inc. (INTU): -2.04% from $549.3 (USD) to $538.08.
• Meta Platforms, Inc. (META): -3.66% from $311.72 (USD) to $300.31.
• Microsoft Corporation (MSFT): -2.5% from $338.7 (USD) to $330.22.
• NVIDIA Corporation (NVDA): -3.69% from $455.81 (USD) to $439.
• NetEase, Inc. (NTES): -0.26% from $101.76 (USD) to $101.5.
• Oracle Corporation (ORCL): -10.1% from $126.71 (USD) to $113.91.
• Taiwan Semiconductor Manufacturing Company (TSM): -2.43% from $91.47 (USD) to $89.25.

In conclusion, while tech stocks are facing challenges, it's essential to maintain a balanced perspective and closely monitor market developments before drawing definitive conclusions about the future of the tech sector.