Global technology shares traded cautiously on Thursday, with U.S. futures edging lower as investors braced for Federal Reserve Chair Jerome Powell’s address at the Jackson Hole symposium. Valuations in high-growth sectors remain stretched, leaving sentiment fragile ahead of potential policy signals.
Technology indices under pressure
Nasdaq futures slipped, reflecting caution around large-cap growth names that have driven much of this year’s rally. Nvidia managed modest gains, but other major technology leaders including Apple, Microsoft and Alphabet, traded mixed in pre-market activity. Analysts noted that profit-taking in the sector has become more evident, with investors unwilling to increase exposure ahead of clarity on monetary policy.
Valuations are a growing concern
Market commentators pointed out that technology stocks remain vulnerable to any hawkish interpretation of Powell’s remarks. Price-to-earnings ratios in leading U.S. companies remain well above historical averages, a position made more precarious by lingering inflation and questions over the durability of consumer demand. In Europe, technology benchmarks also mirrored this caution, showing limited momentum.
AI sector sentiment is mixed
Artificial intelligence remains a focal point for investor optimism, but the rally has slowed in recent weeks. While demand for AI infrastructure and cloud computing remains robust, there is increasing scrutiny of whether revenue growth will meet heightened expectations. Several analysts have warned that the AI trade is now closely tied to broader liquidity conditions, leaving it especially exposed to shifts in Fed policy.
Investor flows and positioning
Institutional positioning has turned defensive, with a move towards hedging strategies and reduced leverage in derivatives markets. While long-term conviction in the sector remains intact, short-term sentiment is firmly tied to macroeconomic developments. Traders emphasised that the Nasdaq’s next moves are likely to depend almost entirely on Powell’s tone regarding inflation and growth.
Outlook
Technology and AI stocks are expected to remain range-bound until the Fed provides clear guidance. A dovish stance could renew risk appetite and reinvigorate the rally in high-growth names, while a hawkish surprise would likely trigger further selling. The sector remains one of the most sensitive to changes in liquidity, making Jackson Hole a key moment for investors.
REFH – Newshub, 21 August 2025
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