The consecutive interest rate increases implemented so far this year, and the possibility of further hikes to fight record-high inflation, have driven a massive sell-off in the tech sector over the past few weeks. However, the tech sector might eventually absorb the tight monetary policies and rebound, given the increasing dependence on tech solutions. Yesterday, the tech-heavy Nasdaq composite rebounded 1.6% on talks of a possible easing of tariffs on China.
Furthermore, the demand for solutions remains strong and is expected to continue growing. Microsoft recently declared pay hikes for its workers, implying that the tech labor market is strong. Considering rapid digitization and widespread hybrid work culture, undervalued tech stocks with robust financials might rebound soon.
