Once Wall Street's stars, Big Tech falls back to Earth

NEW YORK (AP) — After years of screaming higher, almost regardless of what the economy was doing, tech-oriented stocks are tanking and dragging down the rest of Wall Street.

Many of these high-profile companies are still making billions of dollars in profits, and they continue to dominate the top of the rankings for most valuable businesses. But two big changes have caused their stocks to come sharply back to Earth this year: Interest rates are rising, and expectations for their big continued growth suddenly look much more shaky.

Consider Netflix, whose stock more than tripled between early 2018 and its peak last November. It's since lost virtually all that gain, dropping by more than two thirds this year alone for the worst loss in the S&P 500 as of Tuesday.

Similarly, Facebook parent Meta Platforms has lost close to half its value this year. Neither company falls into Wall Street's “technology” classification; they're instead categorized as “communications services” companies, along with many other internet-related stocks.

But they are both big parts of the Nasdaq composite index, along with such tech heavyweights as Apple and Microsoft. And the Nasdaq is on pace for its worst month since the 2008 financial crisis. Its drop of 20.2% for the year, as of Tuesday, was much worse than the 12.4% fall for the S&P 500 or the 8.5% slip for the Dow Jones Industrial Average, which has less of a tech focus.

The tech stocks in the S&P 500 are down 19.8% for the year through Tuesday, while communications services stocks in the index tumbled even more, 24.1%. The rest of the S&P 500 fell only 6.9%.

Tech-oriented stocks have struggled in large part because interest rates have shot to their highest level in years. The 10-year Treasury yield, for example, topped...