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Why the tech stock selloff matters

Rising U.S. bond yields again sent tech stocks tumbling on Monday, with the tech-heavy Nasdaq composite index falling into its third 10% correction in the last year.

Why it matters: With the real economy still depressed, especially the labor market, continued weakness in Big Tech and a deflating housing market could undercut the expected economic recovery.


  • Both stocks and housing have been underpinned by historically low interest rates and inflation expectations, which now are jumping at the fastest pace in years.

What it means: Tech stocks have been incredibly volatile over the past year, rising and falling more than the rest of the market, as even trillion-dollar companies like Apple routinely see 3% and 4% daily moves.

The big picture: The exaggerated stock price moves in tech are amplifying overall market volatility, but that volatility bears watching because of the growing role tech plays in the U.S. economy.

  • All five of the largest U.S. companies by market cap are in tech — Apple, Microsoft, Amazon, Alphabet and Facebook, in that order — and together they hold a market cap of more than $8.2 trillion.
  • The entire S&P 500 has a market cap of $33.9 trillion, according to S&P Global, meaning the Big Five account for just under a quarter of the benchmark U.S. stock index's value.

By the numbers: On Monday, those five companies suffered an average share decline of 3%, led by 4% pullbacks in Apple and Amazon.

  • Tech companies across the board have been stung by the selloff, with previous world-beating market champions including Tesla, Zoom, Nvidia, Square and AMD all down by 20% since Feb. 12, when the Nasdaq hit its last record high.
  • Tesla is actually down by 35% from its last record high on Jan. 26, the third time in about a year it has lost close to a third of its value.

Between the lines: Despite all the talk of investors rotating from big, tech-heavy growth stocks to "cheaper" value stocks over the past month, the biggest beneficiaries of the rotation have been stocks with incredibly high forward price-to-earnings ratios like ExxonMobil (278.2 12-month forward P/E), Disney (60.2) and Mastercard (45.8).

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Olympics grapple with policies on transgender athletes

TOKYO — After 125 years of having no openly transgender competitors at the Olympics, there are several transgender and nonbinary athletes at this year's Games.

Between the lines: While still small in number, the presence of trans athletes has been a major point of controversy at these Games, coming up repeatedly at IOC press conferences and in newspaper headlines around the world.

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Inside a crowded border patrol tent for migrants in Texas

Exclusive photos from inside a U.S. Customs and Border Protection temporary overflow facility in Donna, Texas, reveal the crowded, makeshift conditions at the border as the government's longer term child shelters and family detention centers fill up.

Why it matters: Each of eight "pods" in the so-called soft-sided facility has a 260-person occupancy, said Rep. Henry Cuellar (D-Texas), who provided the photos to Axios to raise awareness about the situation. But as of Sunday, he said, one pod held more than 400 unaccompanied male minors.

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