“Equity investors, in our conversations, are really grappling with two things they may not have had to deal with for the last 10 years,” said Tom Lee, Fundstrat’s co-founder head of research. “One is the potential for inflation to actually have to be priced into equities. I think there’s a lot of confusion.”
“Then it’s a bond market that seems to be testing the Fed, which kind of scares people,” added Lee, who believes the sell-off this week is a buying opportunity.
Tech stocks plunge while energy stocks recover
Tech stocks had the biggest decline Thursday. The Nasdaq Composite plunged 2.1% Thursday while Tesla shares are down 0.3%. The S&P 500 and the Dow both plunged more than 1% Thursday, headed for a losing week. However, energy stocks outperformed with a 2.5% gain in the previous session amid oil price increase.
“Rates soared once again, which opened the door for more selling of technology stocks,” said Ryan Detrick, chief market strategist at LPL Financial. “The bright side is the economy continues to improve and leadership from financials and energy is something that suggests this isn’t a sell everything moment.”
