Federal Reserve, Technology Stocks And Interest Rates

 

The Nasdaq tanked 2.23 % yesterday on the publishing of the FOMC, Federal Open Market Committee statement of the Federal Reserve.

The Federal Reserve hinted it will not target the Federal Funds Rate lower in March 2024 and technology stocks' prices fell by a lot. Alphabet, Google owner fell 7.35 %, Apple fell 1.94 %, Meta Platforms fell by 2.48 % etc., for example.

Technology stocks are especially sensitive to the levels of interest rates, because they usually get financed by venture capital funds, which get their investment money from asset managers, hedge fund managers, pension funds, endowments, which if interest rates are high would prefer to invest in government bonds.

Thus, any hint on the level of interest rates by the Federal Reserve brings volatility to stock market prices.

The Federal Reserve will cut rates four times, 0.25 % each in 2024, according to Wolfteam Ltd.'s projections and estimates.