“If there are more hikes than Wall Street expects, it will be bad for tech and growth stocks. Valuations need to come down.”Growth stocks are highly sensitive to interest rates, which are used to calculate what earnings in the years ahead are worth right now. The Nasdaq 100 has soared 42% this year, and it is trading at 29 times forward earnings. In fact, those top five S&P 500 corporations are forecast to show a 16% profit expansion in the second quarter, according to BI. “That could actually resolve itself, with the rest of the index playing catchup with improving profits.

Source: Economic Times July 23, 2023 16:25 UTC