The rally in technology stocks all year has cooled following Fitch’s downgrade of the U.S. credit rating late Tuesday.
After rising for seven straight months, the S&P 500 Information Technology sector is down 2.4% to kick off August. Other tech-sector indicators are off as well, with the PHLX Semiconductor ETF down 3.7% and the iShares Expanded Tech Software ETF off 3.6%.
The last time the U.S. credit rating got downgraded, back in 2011, Apple Inc.’s
AAPL,
-4.80%
Steve Jobs was busy pitching the new iCloud service while preparing to leave the company he founded for a second time. This time around, Fitch Ratings lowered its rating of U.S. government debt to AA+ from AAA, and Apple, which reports earnings after the bell Thursday, has seen shares decline nearly 2% since the downgrade.
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Month to date, shares of Nvidia Corp.
NVDA,
+0.37%
— which reports on Aug. 23 and has seen its stock more than triple this year — and other hot chip stocks like Marvell Technology Inc.
MRVL,
+0.55%
and Lam Research Corp.
LRCX,
-0.42%
have declined more than 4%, while Advanced Micro Devices Inc., which is up 76% year to date, is down 0.5% for August so far.
Read: Warren Buffett dismisses Fitch downgrade: ‘There are some things you shouldn’t worry about’
On the software side, Microsoft Corp.
MSFT,
+0.34%
and Oracle Corp.
ORCL,
-0.10%
shares are down more than 2% for the month so far, while Adobe Inc.’s
ADBE,
+0.60%
have slid 3%, and Salesforce Inc.
CRM,
-0.45%
shares have dropped 4%, and shares of cybersecurity company Palo Alto Networks Inc.
PANW,
-8.06%
have fallen nearly 6%, according to FactSet.
Meanwhile, the SOX index is still up 46% year to date this year, the IGV index is up 37%, while the S&P 500 has grown 17%, and the Nasdaq has rallied 33%.
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