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,
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.
Flashback to August 2011: The top 10 events that shaped a bear of an August
Month to date, shares of Nvidia Corp.
NVDA,
— 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,
and Lam Research Corp.
LRCX,
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,
and Oracle Corp.
ORCL,
shares are down more than 2% for the month so far, while Adobe Inc.’s
ADBE,
have slid 3%, and Salesforce Inc.
CRM,
shares have dropped 4%, and shares of cybersecurity company Palo Alto Networks Inc.
PANW,
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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