IT Stocks Experience Biggest Drop in Six Weeks Following Federal Reserve Rate Cuts

Wednesday, 18 September 2024, 08:35

IT stocks are experiencing their biggest drop in over six weeks as market concerns grow surrounding Federal Reserve rate cuts. The significant decline is attributed to profit booking after a recent rally, as well as Accenture's decision to delay staff promotions, leading to increased negative sentiment in the sector. Valuation issues also contribute to the current downturn, signaling potential challenges for mid-cap IT stocks.
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IT Stocks Experience Biggest Drop in Six Weeks Following Federal Reserve Rate Cuts

IT Stocks Push Down Amid Federal Reserve Rate Cuts

Information technology (IT) stocks have encountered their sharpest decline in over six weeks, reflecting market anxiety surrounding the recent Federal Reserve rate cuts. Factors such as profit booking following a 25% rally and Accenture's postponement of employee promotions have dampened investor attitudes.

Key Factors in the IT Stocks Decline

  • Accenture postponing promotions has fueled negative sentiments.
  • Major declines were observed in stocks like Mphasis (-5.6%), Tata Consultancy Services (-3.5%), with several others dropping over 3%.
  • The decline also reflects historical underperformance of IT stocks during previous Fed rate cut cycles.
  • Market analysts suggest a cautious outlook ahead of the Fed’s monetary policy guidance.

Experts mention that the time gap before a potential recovery in demand may extend up to six months following rate cuts. The IT stock market performance is currently strained by economic uncertainties and industry layoffs.

Market Reactions

The correction in IT stocks has contributed to downward moves in broader indices, with the S&P BSE Sensex and NSE Nifty 50 closing lower on the day. As investors brace for Federal policy announcements, uncertainty lingers, impacting market dynamics.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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